Question: Is the federal subsidy based on the total household income of a person/family or just based on those person(s) enrolling in Covered California? For example, could a couple “work” the system by enrolling as 2 separate individual policies and base the subsidy on his/her own earnings instead of a combined earnings total?
Answer: The household income on which the advance tax credit eligibility is based for a married couple would usually be the total income. This would be verified by IRS data showing joint income for federal income tax purposes. So in this scenario it would be very difficult to game the system. The subsidy would be calculated on the joint income even if one of the spouses did not apply for subsidized coverage in Covered California (example: one spouse on Medicare). In this case, the percentage that the couple’s subsidy represents for dual coverage in a Silver Level Plan, could be applied by one eligible spouse for the purchase on any qualified plan in the exchange.