Question: Is there a penalty for under-projecting the income? Are they planning to charge interest on the subsidy difference? All I have heard is that one has to replay the subsidies, but nothing the interest or penalties. Also. I understand that in addition to the direct subsidy on the premium itself, one may qualify for a reduced co-payment and deductibles based on income. Assuming that is true, how will they claw that back if the actual income turns out to be more than the projected income. Based on the answers for the above, wouldn’t it make sense to always undershoot?
Answer: Correction: (I misread this question first time around.) There is no penalty for taking more advance tax credit than you are eligible for except to repay the excess advanced. The cost sharing reductions are not subject to repayment.