Thoughts on Subsidies for High Income Individuals

[kstein]

What are you thoughts on this situation. I have a high net worth individual who is retired at 55. She is losing her group coverage as of 1/1/15 and has the ability to manipulate her income to show a MAGI of whatever she wants for 2015.

If that is the case, then this person can get a fully subsidized plan with limited cost sharing by having an expected income right above 100% of the FPL.

Anyone have thoughts on this? I know there isn't an asset test for ACA plans so her net worth shouldn't matter here. It just feels weird that this is legit.

 

[unic.consulting]

What are you thoughts on this situation. I have a high net worth individual who is retired at 55. She is losing her group coverage as of 1/1/15 and has the ability to manipulate her income to show a MAGI of whatever she wants for 2015.

If that is the case, then this person can get a fully subsidized plan with limited cost sharing by having an expected income right above 100% of the FPL.

Anyone have thoughts on this? I know there isn't an asset test for ACA plans so her net worth shouldn't matter here. It just feels weird that this is legit.

Does she also manipulate her income so she doesn't have to pay any taxes? I think the IRS might have some things to say about that. If she doesn't, she'll get clawbacks for reporting a different MAGI on her taxes.

 

[Yagents]

There are many legal ways to reduce your income, people have been doing it for decades. With ACA, it brings it to a whole new bonus round level (picture bells, lights and whistles).

1. Many clients have after tax assets to live off of.
2. Some clients can delay social security if they understood APTC
3. Delay retirement taxable distributions
4. Start a business
5. Fire your high frequency trader for an advisor
6. Make HSA contributions.

Nothing "dirty" above, all legal, and smart $ planning. Probably the reason they have money in the first place (hint hint).

 

[kstein]

So this gal sold a business and is living off of assets and her own savings. The advisor has her set up so that she really just takes a cash withdrawal each month so it isn't necessairly hiding income or manipulating it as I stated. Just a person with a few million of assets and nominal income ( which can legally be moved from $0 to $12,000 depending on where the cash comes from). It seems this is legit and perfectly fine within Aca

 

[yorkriver1]

I don't recall what financial author said this, but it amounted to what is illustrated in this story.
To sum it up: the tax system favors asset holders. Make efforts to keep assets high and income low, was the advice.
This story is a perfect example.

 

[Ann H]

Millionaires on Medicaid? Yep, totally possible. Millionaires showing a small amount of income to get APTC and CSR? Yep, once again totally possible.

The ACA did not include an asset test. When Medicaid expanded, they also agreed to MAGI income with no asset test (although their MAGI is a little different than ours).

 

[FLM2]

What are you thoughts on this situation. I have a high net worth individual who is retired at 55. She is losing her group coverage as of 1/1/15 and has the ability to manipulate her income to show a MAGI of whatever she wants for 2015.

If that is the case, then this person can get a fully subsidized plan with limited cost sharing by having an expected income right above 100% of the FPL.

Anyone have thoughts on this? I know there isn't an asset test for ACA plans so her net worth shouldn't matter here. It just feels weird that this is legit.

The law is the law is the law, it isn't our role to interpret it, just provide the best coverage at the lowest available rate-if she qualifies for a subsidy then she should get it (although it is her decision as to whether she wants the extra IRS attention-I'm not sure the value of the subsidy is worth that for someone with significant assets).

 

[somarco]

1. Many clients have after tax assets to live off of.
2. Some clients can delay social security if they understood APTC
3. Delay retirement taxable distributions
4. Start a business
5. Fire your high frequency trader for an advisor
6. Make HSA contributions.

Many of those can also be used to alleviate or minimize the SS taxation hit and the Part B & D tax penalty.

 

[ggbh]

She can start a business. That is the ONLY thing that comes to my mind, that is truly legit.

I have people who can't get Medicaid, and need mental help or dependency help. Florida Medicaid has even denied them with NO INCOME!

I help them start a business to meet 11,600 and it is REAL! With llc and all...and they have a product to sell, and I give them an accountant.

Turns out, that 2 of my 8 have loved it, and really stuck with it.

Ok...have to go and help my college daughter...how to write a thesis about Child Labor. That is what you get when you raise them in America with everything. :(

 

[Yagents]

I knew deep down inside that dems love millionaires too, and gave them the key to game the system. Hell, some of us agents may fall in this category next year. Assets and low income. Now, only if I could find an agent to help me.

They're millionaires, and they get Obamacare subsidies