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Obamacare and Cobra Coverage?

My husband's hours are being cut so he'll be a part time employee starting in December rather then full time.  He is on Medicare and VA so won't need insurance, but I'll still need it.  I was going to go onto Obamacare, but we will be adding a lump sum amount from the IRA to our taxes this year, taking our income way up.  With only one month left in this year (2016) I'm thinking it might be cheaper for us to take Cobra out on me and then, after the 1st of the year, switch over to Obama Care, since open enrollment lasts through January 2017.  That way, when I sign up for Obamacare, I'll be using projected 2017 earnings rather then 2016 and the lump sum will not be there, right?  Plus, in 2016 my husband will be making less on his job, so Obamacare should cost considerably less as the projected 2017 income will qualify us for subsidies. 

Cobra will be costly, but only for a couple of months.  I think the over all savings this way will be the greatest.  Does this sound right?


  • I believe that COBRA can only be gotten for the employee or his family in total, not for individual members of his family.

    As to your situation, it seems that you are saying that your 2015 income was low, as will be your 2017 income, but that your 2016 income will be uncharacteristically high.  Yes. since you have done the income event, you must disclose that it will be part of you 2016 income, so presumably you will not be getting any assistance for 2016, and as well, presumably the coverage from COBRA is cheaper, although since you will need to get COBRA for both you and your husband, that might turn out to be more expensive.  Something else to keep in mind is that your COBRA coverage counts as being part of the previous coverage in terms of the deduction & out-of-pocket maximum levels, whereas the new ACA coverage will be a new one, so you would only have 2 months to hit those levels.  Something else to consider is that you technically have 2 months to officially sign up for COBRA, so if you don't use it, you can just go without coverage, after-the-fact.

    As for qualifying for ACA coverage, since you have steady income, you can use that, and you can explain away the high income in 2016 as a combination of higher steady income at that time and the one-time IRA income event.  This might be an issue for you when you apply for 2018 coverage, as the latest tax form filed at the time will be the one from 2016.  You might have the same issue as well for 2017, as the latest tax form filed for then will the one from 2015.  The thing to proactively do is have a copy of a current, lower-income paystub available to send in for proof of income.
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