Question:nMy partner and I are not married, but we live together and we have three children together. In March, I lost my job and with it, our health insurance. Without my income, we qualified for premium assistance subsidies because we had a low estimated annual income. I just took and job (August). I immediately reported our income change to my Covered CA agent. My fear is that at the end of the year our annual income will put us over the limit for qualifying for subsidies and we will be penalized for the five months that we received them. Is that how the system works?
Answer: If your 2015 adjusted gross income exceeds the premium assistance threshold of 400% of the federal poverty level (FPL) ($114,000 for a family of 5), you would end up repaying the IRS for all the subsidy you received for the year. Assuming your income was less than that, you will still repay a portion of what you were have been overpaid. Here’s the repayment schedule:
- Less than 200% FPL ($57k in your case), the amount of the repayment is limited to one-half of $600
- At least 200% but less than 300% ($85k in your case), the amount of the repayment is limited to one-half of $1,500
- At least 300% but less than 400% (114K in your case), the amount of the repayment is limited to one-half of $2,500
You did the right thing by reporting your income change to Covered California as soon as possible to limit the overpayment amount.