How Would You Advise this Client?

[TwoLabs]

I enrolled this family last year. Husband, wife, daughter 24, daughter 23, and son 13. Total HHI was about $40k (majority of which was from husband and wife, one daughter had about $4,800 in part time work). The son was sent over to CHIPs. Subsidy was $778.

For 2015, things have changed. The two daughters are now earning $15k and $10k respectably, but still going to school. Mom and Dad's income is about the same. Playing with the numbers in HealthSherpa, an income of $63,500 takes the son off of CHIPS and makes their out of pocket massively more. I think he's still planning on claiming all 3 of them as dependents, but the girls might need to be filing returns with earnings that high right? (Except in case of a qualified child exemption)?

Once we start getting into all of these tax questions I start to back up a little in my chair. Should I just tell him to get with his CPA and figure out who's going to be on his tax return and what their MAGI is going to be? If he says, "Yes they will file on their own and I won't claim them" then one of the girls will be beneath 100% of the FPL.

These complicated ones aren't quite as fun.

 

[Yagents]

Middle America ................... crushed by this law by having older kids, and crushed by encouraging their kids to get a fricken job.

I hate these scenarios too, but you're thought process is correct

 

[kgmom219]

Not sure where you are located and what the 10K dependent needs to get her to 100% FPL, but don't forget the taxable "earnings" from work study and some scholarships. That might push her over the top. With 2 kids on college at $63K, they are probably getting some sort of financial aid.

 

[TwoLabs]

Thanks for the replies. I just got off the phone with him and he's cancelling and going to pay the penalty. Last year his son was on Chips and he was paying out of pocket $46.11 per month for the 4 of them on the PPO $6,000 deductible.

Now with his kids added income throwing everything off, his son will be off of Chips on their plan. Their subsidy actually goes down, and his net premium would've been $420 per month. All the while trying to help his girls pay for college.

I feel for the guy but he's electing to just pay the $1300 or so penalty.

 

[YouGotMyMoney]

It is what is sometimes, I had one client going from 500 mo ppo pre-2014, being dropped, now options are 1k for coventry hmo or 1400+ for assurant/cigna ppo.

Those are some crappy options, ridiculous imagine going for auto loan and being told everyone is GI, but mandatory 25% interest rate on all loans....lol