Question: I understand that if I under-estimate my income, I may have to pay back some portion of the subsidies that I have received. Is there any problem with over-estimating one’s income for the year. I am thinking of a case when your original estimate does not put your 18-under kids onto Medi-Cal, but your actual income would have.
Answer: Yes. There could be significant tax consequences for your household. When you pay your taxes for that year, and your income would have qualified your children for Medi-Cal, the entire amount that you drew in advance tax credits could be due with the filing of your return.
Brian, You’ll become eligible for Medi-Cal but won’t have to repay the CC subsidy, nor is there a penalty.
I am self employed if I estimate enough to qualify but end up at tax time with non qualifying to low income at tax filing will I have to pay back subsidies
Cyn, first, there is no penalty. Repaying some of what you’ve been given is not a penalty. If your actual income is below 128% of FPL - Covered California / Medi-Cal threshold - you repay nothing. If your actual income is over 400% of FPL you will have to repay all of the premium assistance you received. If your actual income is less than 400% FPL but more than 128% FPL you repay only a portion of the overage in premium assistance you received. In neither case do you repay the “cost sharing reductions” you got with you Silver 94 coverage.
Phil, I’m confused. I think I read that there is no penalty for overestimating my income, but here you are saying there is. I’m one of those self-employed people whose income is completely unpredictable. I overestimated to get covered california, and included my children, even though they have scholarships for their own health insurance at college. This granted me and my children health care with the silver 94 plan with Kaiser at the maximum premium assistance (I believe). But if I can’t make that much money this year, I’m still confused what will happen. You say they will give me a refund and not to worry about it, but if I make enough less that I drop below California Covered’s minimum requirement, making me ineligible for premium assistance, could I have to pay back the full price of health insurance? What should I do? I can only (barely) afford the minimum.
Children are eligible for Medi-Cal if household family income is under 250% of the Federal Poverty Level (FPL).
Keep in mind the clawback limits under section 36(b): http://www.law.cornell.edu/uscode/text/26/36B
It’s hard for me to figure out a scenario in which family income would qualify a child for medicaid, while the family’s income also exceeds 200% of the poverty line — so I think the maximum clawback would be $600 in the scenario described.