Here's the problem: We live in South Carolina, which did not expand the Medicaid program. To be eligible for an exchange subsidy, you have to make more than 138% of the poverty level. To be eligible for Medicaid, you have to make no more than 100% of the poverty level. People in-between fall into the notorious Medicaid "Gap."
My son is considered self employed/freelance as a contract carpenter. He gets a 1099, not a W2. He signed up for private health insurance through healthcare.gov and got great insurance. We were very pleased. Then after doing his taxes this year, I had a moment of panic, and a question I don't know the answer to. I'm going to try to crowd-source the answer.
After we took off his business expenses (mostly truck mileage -- trips out to the various sites his boss asks him to come to, picking up other crew members, going for supplies, etc., plus phone/walkie and some expensive tools of his own that he brings to the jobs), he had income that amounted to less than 138% of the poverty line, so officially he isn't eligible for his private insurance and should be on Medicaid....in any other state. In THIS state, though, he should be on ....nothing?
Okay, I understand that 2013 AGI isn't the official figure for how much he is going to make this year, 2014, but he could also do a lot worse, because this construction stuff is iffy work. Maybe business for his boss could fall off as much as it did in 2011, when he struggled just to get painting jobs for his guys. Son could also end up below the poverty line and into "real" Medicaid territory next year! (Weather has already cut into his early income this year.)
Here's my question: Would they actually kick him off his already purchased insurance, or make him pay back the subsidy on his 2014 taxes, when he wouldn't have the money, and THEN kick him off onto Medicaid (or Nothing) for 2015? As it is, he doesn't have the money this year to pay his $775 self-employment (Social Security) tax.
This young man is still living at home and is seriously poor after his truck payment and insurance every month. It just doesn't seem right that his boss is exploiting him with 1099s which make him pay his own SS, and then Nikki Haley tosses him off Medicaid if he makes a dollar more than the poverty line, and Obamacare takes away his subsidy if he makes a dollar less than 138% of the line.
Anybody know what to do? Approaching the boss for a W2 arrangement is a non-starter, because there are carpenters lining up out here willing to work for less than sons make hourly, AND on 1099s. Or totally under the table. If son wants more money or a W2, it's sayonara. Economy is fooged = My son's future is fooged.
But I still want to know how to help him now with this specific problem.