Estate Planning Attorney Kavesh Minor & Otis

This week, I answer readers’ questions about how income and other assets will affect health insurance choices and responsibilities under the Affordable Care Act.

The Affordable Care Act (ACA), also known as Obamacare, is now just beginning to take effect. If you have not heard, there still are many questions to ask and problems to resolve.

The states have their own part to play under the ACA (and may delay putting certain changes into effect until 2015). Closer to home, there is still the matter of how it affects you, the individual, and how you and your family can plan for your health insurance under the law.

Kaiser Health News provided some important insights as part of a Q&A entitled, importantly, “Income — Not Assets — Will Determine Subsidies In Online Insurance Marketplaces.

Indeed, the perennial problem many retirees and elderly Americans face is having more assets “on paper” than they do in terms of spendable income. That only makes sense because you planned to have a nest egg sustain your retirement. Now that you have that nest egg, you draw from it only what you need.

As far as ACA is concerned, it is important to know that ACA requires health insurance and will soften the blow with subsidized insurances (when purchased via a health insurance exchange). The government subsidies are not based on your assets, but only on your income.

As a result, anything you earn from the stocks you own, for example, is still income. However, assets in IRAs or plain old bank accounts will not count against you in terms of insurance. In other words, the nest egg is not meant to be threatened by the health insurance requirement.

Philip J. Kavesh
Nationally recognized attorney helping clients with customized estate planning guidance for over 40 years.
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