Hello!
As you can see from my other posts, I am kind of on a sabbatical after hitting my FI number. I have an ObamaCare question and a COBRA question, each. The two questions are below.
1. COBRA first. From what I can see online, there is something people call the COBRA loophole, but tactically means, I could take 60 days from when my health insurance benefit ends (assume 9/30 is last coverage day of employer coverage), elect COBRA (not having paid a premium), and then within 45 days after that, begin paying back the premium. If I do pay the premium in that period (say elect day 60 and then pay on the 45th day after), then I have had insurance back to Day 1 (i.e. Oct 1). If I elect on day 60 to have COBRA health insurance benefits and then do not pay on the 45th day after that, then I had elected, but I haven't paid, so my insurance gets cancelled around day 60 plus 45. Assume I don't go to any health care providers in that time. Is this correct (and if not, please correct)?
Because I could use Obamacare as a backstop starting Jan 1 (having elected by December 15, 2024), it seems to me, if I am correct that I could use the COBRA process above to have insurance from October 1 through year end in my back pocket, so to speak, and then move over to ObamaCare on Jan 1. (This may be rational if my ObamaCare income (income for purposes of calculating subsidies) will be low in 2025).
2. After paying lots of money in taxes, I am gaming out Obamacare as a backstop for insurance starting January 1, 2025. It is clear to me that in calculating the subsidy, capital gains, and interest on a mutual fund money market account (i.e. VMFXX) are included in calculating income for the purposes of the subsidy. Is income from the Vanguard Municipal Money Market (VMSXX) Fund EXCLUDED from income for the purposes of the Obamacare subsidy calculation? Note ordinarily income from that fund is exempt from federal income tax. (I logically believe it should be excluded, but I understand that logic is not determinative in the land of taxes and subsidies). Note the difference between counting the interest could be pretty substantial if one had multiple years of expenses in VMFXX.
Thank you in advance!!!
As you can see from my other posts, I am kind of on a sabbatical after hitting my FI number. I have an ObamaCare question and a COBRA question, each. The two questions are below.
1. COBRA first. From what I can see online, there is something people call the COBRA loophole, but tactically means, I could take 60 days from when my health insurance benefit ends (assume 9/30 is last coverage day of employer coverage), elect COBRA (not having paid a premium), and then within 45 days after that, begin paying back the premium. If I do pay the premium in that period (say elect day 60 and then pay on the 45th day after), then I have had insurance back to Day 1 (i.e. Oct 1). If I elect on day 60 to have COBRA health insurance benefits and then do not pay on the 45th day after that, then I had elected, but I haven't paid, so my insurance gets cancelled around day 60 plus 45. Assume I don't go to any health care providers in that time. Is this correct (and if not, please correct)?
Because I could use Obamacare as a backstop starting Jan 1 (having elected by December 15, 2024), it seems to me, if I am correct that I could use the COBRA process above to have insurance from October 1 through year end in my back pocket, so to speak, and then move over to ObamaCare on Jan 1. (This may be rational if my ObamaCare income (income for purposes of calculating subsidies) will be low in 2025).
2. After paying lots of money in taxes, I am gaming out Obamacare as a backstop for insurance starting January 1, 2025. It is clear to me that in calculating the subsidy, capital gains, and interest on a mutual fund money market account (i.e. VMFXX) are included in calculating income for the purposes of the subsidy. Is income from the Vanguard Municipal Money Market (VMSXX) Fund EXCLUDED from income for the purposes of the Obamacare subsidy calculation? Note ordinarily income from that fund is exempt from federal income tax. (I logically believe it should be excluded, but I understand that logic is not determinative in the land of taxes and subsidies). Note the difference between counting the interest could be pretty substantial if one had multiple years of expenses in VMFXX.
Thank you in advance!!!
Statistics: Posted by BogleRocksDB — Fri Sep 27, 2024 4:02 pm — Replies 2 — Views 167