Work more, get less in Obamacare cliff

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http://www.cnbc.com/id/100921864

Be careful you don't fall off the Obamacare "cliff" when the boss asks you to put in some overtime. Working more could ultimately mean thousands of dollars less for you under a quirk in the new health-care law going into effect this fall. This could prompt some people to cut back on their hours to avoid losing money. "Working more can actually leave you worse off," the price-comparison site ValuePenguin.com notes in a new analysis. "It's sort of an absurd scenario," said Jonathan Wu, ValuePenguin.com's co-founder. "It's something for people to be aware of." In that scenario, an individual or family whose annual income surpasses maximums set by the federal government—if only by $1—will totally lose subsidies available to buy health insurance under the Affordable Care Act. (Read more: Obamacare fraud?) The loss of those subsidies in some cases will mean that people potentially would have been better off financially if they had worked less during the year, Wu said. And they then would have to work significantly more to make up for the lost subsidy. Play Video CKE CEO on Obamacare and jobs CKE Restaurants CEO Andrew Puzder explains why he thinks the employer mandate of Obamacare should be "permanently waived." "I think they'd be surprised to see how drastic it is," said Wu. "I'd be kind of shocked to see if I make $100 less (in total income each year), I get all these benefits, but if I make $100 more, I get nothing." "You basically don't want to fall in that hole," said Wu, adding that he believed contractors and others with more control over their incomes would be apt to adjust their hours worked to avoid the subsidy cliff. He also said that because of lower insurance premiums often offered younger people, the effect will more likely be seen by older people. But "you will see it across all age groups" in the seven states including New York and Vermont where insurance premiums are either barred from being affected by age, or restricted from being dramatically affected, he said. Under the ACA, federal subsidies in the form of tax credits to buy insurance on new state health insurance exchanges will be available to millions of people who can start enrolling on those exchanges Oct. 1. The subsidies are available to people or families whose incomes total 400 percent above the federal poverty level or less, and are designed to cap their insurance premiums at 9.5 percent of their total income. Doing the math For a single person, that FPL income maximum is $45,960 per year. The maximums are adjusted upward for couples and families until maxing out at $94,200 for a family of four. (Read more: Doctors skeptical, confused about Obamacare) Under a scenario that ValuePenguin.com identified, a couple in Ohio, both age 50, would be eligible for subsidies worth $3,452 to purchase a so-called silver insurance plan—a moderately priced level of benefits under the ACA's scheme—that costs $9,346 annually if they made up to $62,040 per year. But if they made just $1 more than that, they would lose the subsidy. Wu noted that the couple then would have to earn at least $65,492 to make up for the lost subsidy. Maximum income levels for Obamacare insurance subsidies, and premium maximums Household Size 400% FPL Premium Cap 1 (Single) $45,960 $4,366 2 (Couple) $62,040 $5,893 3 $78,120 $7,421 4 $94,200 $8,949 Source: ValuePenguin.com In New York, a family of three whose annual income totals $78,120, would pay $12,784 for the second-lower-priced silver plan on that state's insurance exchange. After getting a $5,363 tax credit, the family's net cost for the insurance would be $7,421. But if the family earned even slightly more than $78,120, they would have to pay the entire $12,784 for the insurance because they then wouldn't qualify for the subsidy. To make up for that, the family's annual income would have to reach $83,483, Wu said. The age effect The stark effect of peoples' age in determining their risk from the subsidy cliff is seen in two examples from Connecticut. (Read more: This could put Obamacare in the ER) There, Wu said, a 27-year-old single man would pay $3,636 annually for the second-cheapest silver plan—less than the $4,366 cap on insurance premiums for individuals earning $45,960 or less annually. That person would not be eligible for subsidies, and thus would see no disincentive in working more hours. But the annual premiums for a 50-year-old Connecticut couple buying that plan would be $12,468. If their combined incomes were $62,040 or less, they would receive $6,575 in subsidies to offset the cost. However, if their income was more than that, they would lose the subsidies, leaving them out of pocket $6,575. They then would have to earn at least $68,615 to make up for that lost subsidy, Wu said.

This is what happens when you pass a bill and then read it. KoE1R-xH5To

[punjabi_khota]

Indeed seems like a rookie error. Easily fixable though.

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Indeed seems like a rookie error. Easily fixable though.

Like this error? http://www.washingtonpost.com/blogs/post-partisan/wp/2013/07/08/the-insiders-obamacare-and-the-growth-of-part-time-jobs/

The Insiders: Obamacare and the growth of part-time jobs By Ed Rogers, Published: July 8 at 4:12 pmE-mail the writer The Wall Street Journal editorial “Part-Time America†may not have gotten all the attention it deserves because of the Fourth of July holiday, but it raises an important point regarding Obamacare that I believe has been underreported. Despite the mostly favorable coverage of last week’s jobs report, the fine print of the report included the revelation that the number of Americans who want to work full time but could only find part-time work went up by 322,000. The number of part-time employees is now at an all-time high of more than 8.2 million. To put that number into perspective, that’s equal to the entire population of the state of Virginia. It appears that employers were already preparing for Obamacare by working to reduce the number of full-time employees they would have had to buy health-care insurance for. Maybe the White House knew for certain what the rest of us just suspected, or the administration had a sneak peek at the June data and realized that the need to delay the Obamacare employer mandate was urgent. With the employer mandate delayed, the White House has bought itself a year — but what is it about a one-year delay that will make the choice for business any less obvious? A one-year delay won’t make employers’ choices any better or make them anymore likely to want to take actions that will be harmful to their businesses. The old adage is, “If you want less of something, tax it; if you want more of something, subsidize it.†Well, Obamacare creates a big new tax on full-time employees. So what does common sense tell us about that? It tells us there will be fewer full-time employees and more part-time employees as employers work to minimize their costs and vulnerability under Obamacare. And, oh by the way, Obamacare reveals that the White House adopts a 30-hour week as full-time employment. That’s only a half step away from a government-mandated 30-hour workweek that is the holy grail of rabid socialists everywhere. With Obamacare creating a drag on hiring, the Federal Reserve signaling that the party on Wall Street will eventually end and the next round of earnings reports unlikely to show much growth, the economy will not only remain weak but also will be vulnerable to getting worse between now and the midterm elections.

Your premiums are up, your taxes are up, more people will be part-time, more exemptions for unions and other powerful entities are coming, the proclaimed deficit reductions have already disappeared as implementation costs rise and worst of all, small healthcare providers are being squeezed by the regulations even as the big corporate hospitals are benefiting. Like our Democrat friend Max Baucus (one of the authors of the law) called it - PPACA is a trainwreck. All for one thing - it was peddled by the charismatic custodian of hope and change and felt like a good idea at that time. It won hearts and elections with the good intentioned bits. But, the road to economic doom is paved with feel-good ideas and good intentions.

[Laaloo]

:((

[Desi Cartman]

People will lose benefits but it shouldnt be all or none. In Aus one loses almost all benefits once the household salary crosses 150k so you make 149, you are eligible for quite a few benefits but at 150 its 0. The drop will happen but then it should be gradual and different slabs.