Roe & Associates Insurance and Financial Services Contact UsContact Us Call843.740.1723
Navigation

 

  AUTOMOBILE   HOMEOWNERS   BUSINESS & COMMERCIAL   LIFE & HEALTH  

When you apply for Obamacare through your health insurance exchange, you need to estimate what your family income for 2014 will be. If you estimate it will be below 400% of the federal poverty level for a family your size, you will be eligible to receive a subsidy to help pay your monthly insurance premiums. The amount of the premium assistance is based on your estimated income and the amount of your health insurance premiums. This premium assistance can be worth thousands of dollars per year.

But what happens if it turns out you underestimate your 2014 income? If you already benefited form premium assistance payments, you’ll have to pay them back to the IRS when you file your 2014 income taxes. The amount you’ll have to pay back depends on your 2014 family income. If your 2014 income is below 400% of the federal poverty level, there is a cap on the amount you’ll have to pay back, even if you received more in assistance than the amount of the cap. However, at higher income levels, you’ll have to pay back the entire amount you received, which could be a lot.

The following chart shows how much individuals and families will be required to pay back.

Income, based on federal poverty level

 

Annual Household Income for an Individual

 

Individual Payback of Obamacare Premium Assistance

Annual Household Income for a Family of Four

 

Family Payback of Obamacare Premium Assistance

Less than 200%

 

Under $22,980

 

Capped at $300

 

Under $47,100

 

Capped at $600

At or above 200% to 300%

 

$22,980 – $34,470

 

Capped at $750

 

$47,100 - $70,650

 

Capped at $1,500

At or above 300% to 400%

 

$34,470-$45,960

Capped at $1,250

$70,650 – $94,200

 

Capped at $2,500

Greater than 400%

 

$45,961 and higher

Full amount received

$94,201 and higher

Full amount received

Example: Ernest, a 45-year-old single self-employed writer who lives in San Francisco, obtained health coverage through the California health insurance exchange (covered.ca). He estimated that his 2014 income would be $30,000. Based on his age and income, he qualified for a premium assistance of $216 per month, or $2,592. However, it turns out that Ernest had a better year than he thought he would: He actually earned $40,000 in 2014. Based on this income, he was actually entitled to premium assistance of only $109 per month, or $1,308. He received $1,284 more in assistance than he should have. However, he only has to pay back $1,250 because this is the cap for people at his income level. Had his income been $46,000 or more, he would have to pay back the entire $2,592.

One way to avoid having to pay back all or part of your Obamacare premium assistance is to report to your health exchange any changes in your income during the year. The exchange can adjust downward the amount of premium assistance you receive for the remainder of the year.

Another way to avoid having to repay all or part your premium assistance is to elect to have all or part of your premium assistance sent to you as a tax refund when you file your tax return, instead of paid in advance to your health insurer during the year. In other words, you pay the entire amount out of your own pocket during the year, and then you are reimbursed by the amount of premium assistance you qualify for.

For details, see your health insurance exchange. Links to your state exchange are at healthcare.gov.

(Source: nolo.org)

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Content bottom

Quick Links

 
Our Carriers Our Company Services Contact Us More Help
Progressive
Safeco
Liberty Mutual
Travelers
Foremost
Main Street
Montgomery Insurance
Home
Who We Are
Events
Customer Service
Get A Quote
Insurance Types
Send A Message
Locations
Glossary
Frequently Asked Questions
GET SOCIAL WITH US Facebook Twitter LinkedIn Google+ YouTube Blog RSS Feed
Roe & Associates, Inc.
7089 Rivers Ave | North Charleston, SC 29406
| Ph: 843.740.1723
| Fx: 843.740.0178
Powered by Insurance Website Builder

Join Our Newsletter Make A Payment Our Partners Get A Quote Meet Your Agent
Are you saving the maximum amount of money possible on your existing insurance policy?