115

The tax return of a dependent does not flow to the parents return. Earned income is taxed at your own rate, up to $12,000 tax free. for your own standard deduction, but unearned income is taxed at higher trust rates. No idea where they are getting this information from. If your parents' insurance is somehow tied to "family income," things change. It's still ...


101

I think the key to this question is your last sentence, because it's applicable to everyone, high net-worth or not: How would one determine whether they are better off without insurance? In general, insurance is a net good when the coverage would prevent a 'catastrophic' event. If a catastrophic event doesn't happen, oh well, you wasted money on ...


89

To be clear, this has nothing to do with tax brackets. (There's a longstanding belief that getting into a higher income bracket will increase taxes on all your income, when that bracket just applies to your new income.) Instead, this has to do with eligibility to (I believe) Apple Health, which is Washington's low-income health insurance program. This pdf ...


60

The individual mandate is still in effect for 2018, which means you have to have qualifying health coverage or pay a fine--I can't find the penalties for 2018 but for 2017 it was the greater of 2.5% of your total household adjusted gross income, or $695 per adult. The new tax law does repeal the individual mandate starting in 2019. However, it would be ...


57

Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a coin, and if heads you are given 3 times your bet, and if tails you lose your bet. Naively you'd think "great, I should play, and bet every dollar I have!" -- ...


46

There are 2 maxims that help make sense of insurance: never insure anything you can afford to replace always insure anything you can't afford to lose Following those 2 rules, "normal" insurance makes sense. Can't afford to replace your car? insure it. Can afford to lose your TV? Don't insure it. People with a net worth in the low millions have very ...


24

The point of insurance is to trade high variable costs for much lower fixed costs. The question isn't whether you can afford what would be a catastrophic event for anyone else, but whether it would be better to pay a small amount regularly vs. a possibly larger amount occasionally. One of the reasons to buy insurance is to avoid costly litigation (rich ...


24

The amount the employee pays for health insurance premiums is not included in your W-2 Box 1 income. As a result, it is automatically deducted, and you do not pay tax on that portion of your income. You cannot deduct it again on line 29 or on Schedule A, because the income is already deducted/not included on line 7.


24

HR told us nothing could be done to correct it. Is this true? Probably not. I think it helps that only 11 days (now 12) has passed since coverage ended. It's possible the (incorrect) premium hasn't even been paid yet out of your husband's paycheck. IMHO, there would be someone at the company that can help you fix this. I'm sure they can get creative and ...


24

No. Since 2014, the concept of pre-existing conditions affecting coverage or rates no longer exists in the US: Under current law, health insurance companies can’t refuse to cover you or charge you more just because you have a “pre-existing condition” — that is, a health problem you had before the date that new health coverage starts. These rules went ...


23

She should check with her school. They may offer low cost insurance coverage. I had an ex who years ago got her insurance through her college. I don't remember if it covered the year or the semester, but I remember being surprised how cheap it was (pre-ACA). If you're in New York, check the New York State of Health website, as you can apply through there ...


23

I feel like it's worth talking about the "tax bracket" part of this question, as it's a common misconception. Let's suppose we're dealing with a simple tax system with two brackets: 20% up to $100,000 a year, and 25% above that. Now let's say I make $98,000 a year and I'm taxed at 20%. That means I pay $19,600 a year in taxes. Now suppose that I get a $...


21

The big difference for me is that my contribution thorough a cafeteria plan also skips Social Security and Medicare taxes. That is a 6.2% (SS) + 1.45% (Medicare) tax on those contributions if done outside a cafeteria plan. Some companies make a contribution to a the HSA. If you handle your contributions outside of their channels they may see you as a non-...


20

Possibility 1: Reimbursement exceeds contributions You elect to contribute $1,200 to the FSA ($100 a month). In February, you submit $2,000 worth of expenses. You are reimbursed $1,200. In March, you are laid off. In this case, you've paid $300, but received $1,200. Your employer cannot compel you to pay the difference. Quoting Div 125, a provider: ...


20

It depends on what you mean by “overages.” FSA plans have a feature called “uniform coverage.” When you sign up for the plan with your employer, you are signing up for coverage up to a certain dollar amount and you agree to pay that same dollar amount out of your paychecks over the course of the year. “Uniform coverage” means that you are covered for the ...


18

Thanks for your question. Unfortunately, you're correct that these types of benefits often are not well explained. Let me apologize in advance for a long answer, but I'd like to provide the most comprehensive explanation I can. Additionally, there are a number of factors involved that weren't mentioned in your example, but that could substantially affect ...


18

This is a question I asked myself while considering an HSA, and I couldn't find any answers, so now that I have one, I'm answering it myself. I asked a family-friend/investment-banker about it, and he suggested you could only make distributions when on an eligible HDHP, but wasn't completely sure. I was about to post the question here to confirm or ...


18

I see this sort of misconception flying around. "Well the health insurance takes my money, makes a profit, and pays me only if I need it, otherwise I 'lose' money. Clearly, I would be better off saving my money." This sort of reasoning completely misses the point of insurance. Suppose you plan to pay $2,400 a year for either insurance or as savings in an ...


18

The HSA for most people, is a way to take pretax money and be able to use it for healthcare. No 7.5%/10% floor or need to itemize taxes in any way. It’s available based on the health plan you have, and a benefit for those who can set aside a bit of money to avoid tax. If you have zero $ out of pocket, and you plan offers no investment option, your point is ...


18

Coverage under the Affordable Care Act can only be obtained during the Open Enrollment Period, which next starts November 1st, 2018. There are a few exceptions to this, though, such as getting married or having a baby, which would automatically make her eligible for a short period after the Qualifying Life Event occurs. You can read more about the options on ...


17

You may decline your company's insurance and keep your existing insurance on the exchange. It's rare for the exchange to be cheaper than an employer's plan, in part because the employer subsidizes a portion of it. But, assuming your math is correct and you are better off staying on the exchange plan, there is no "penalty" for you to worry about. The normal ...


16

Insurance provided by companies on a pre-tax basis must follow IRS regulations. Insurance is part of a "cafeteria plan" and they must limit your ability to change the items in the plan except during an annual open season, or after an IRS defined life event. The Affordable Care Act also has the concept of open season, to minimize the ability to wait until a ...


16

There are a couple of things that are missing from the analysis. The PPO plans feature a copay for doctors visits and prescriptions. For example, if you need to see your doctor, under the PPO plans, you would pay $20 out-of-pocket. Under the HDHP plan, you would pay the negotiated price for a doctors visit. We don't know right now what this is, but let's ...


16

It's very common for two income households to each have separate insurance - at least until you have children. That's because of exactly what you describe: the employer will often cover a higher amount of the employee's premium than other family members. As far as for what you should watch out for: Two insurances might mean two insurers, might mean non-...


15

Starting in 2014, most people will be required to have health insurance or pay a penalty if they don't. Coverage may include employer-provided insurance, coverage someone buys on their own, or Medicaid. Several groups are exempt from the requirement to obtain coverage or pay the penalty, including: people who would have to pay more than 8% of their income ...


15

During World War II, the United States (US) instituted wage and price controls. To attract better employees, companies would offer benefits to get around salary limits. Health insurance was one of the more successful benefits. At that time, income taxes were newer and there were many ways to evade them. Companies could generally deduct expenses. So at ...


15

"100% after deductible" means that you pay nothing once you have met your deductible. "80% after deductible" means that you pay 20% once you have met your deductible. "Covered 100%" means that you pay nothing for these services at any time.


14

Your best bet is to call your insurance provider and ask. Typically copays do not count towards the deductible but do count towards the Out Of Pocket Max. It's probably the case that the PCP does not know that you hit your OOP max and charged the copay as your insurance card instructs. I expect you will receive a reimbursement check from your insurance ...


14

From Wikipedia: In the context of healthcare in the United States, a pre-existing condition is a medical condition that started before a person's health benefits went into effect. So in your case, no, this would not be considered a pre-existing condition since she has had coverage since birth. A condition that was diagnosed while you're covered by ...


13

Unfortunately you don't. Next time you will know not to agree to any dental procedure without having a quote from your insurance provider. Decent dentists will call up the insurance and get that quote pre-approved for you, and if your dentist doesn't do that - switch (again...). All you can do now is just tell everyone and everywhere (including yelp) how ...


Only top voted, non community-wiki answers of a minimum length are eligible