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Underestimated Income Penalty?

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Question: I underestimated my daughters income thinking her college tuition would be deducted. Now, thinking it will not be which makes her income closer to 200% (around $22,000) which would put her in a bronze plan as opposed to the 94% shared plan she has had. Looks like her monthly payment would be similar for both. Should I contact Covered CA now to ask and potentially correct or just wait until next year when taxes are done? Will there be any charges if she no longer qualifies for the 94% plan she has had?

Answer: Your daughter can choose a Silver plan or any other "metal" level of coverage regardless of her income. Her income still qualifies her for cost-sharing reductions (lower deductible and lower copayments) which are only available with Silver plan. If she is no longer eligible for the Silver 94, then she will qualify for the Silver 87 plan. In any case her share of the premium will be around $110 per month. If she was advanced too much tax credit as a result of underestimating her income, she'll give some back when she pays her taxes for 2014, but it should not exceed $600 if her income is 200% FPL or less.


No, you misunderstood the paper application — that referred to the tuition deduction that existed in previous years, but the maximum ever allowed was $4000, no matter what actual tuition costs are.

That tuition deduction expired at the end of 2013, however … so it is no longer available to reduce income (unless Congress changes the law before tax time).

However, it is true that at her income level, there is a cap on how much the government can ask her to pay back.

Still trying to figure out if she underestimated. I am not sure how her college tuition impacts income. The paper application indicates in would be deducted. She has around $6,000 in college expenses. Expecting she will qualify for a tax credit but would any of this come off her income for Covered CA? Thanks for the information!

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