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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Employed Now, Can I Keep Subsidized Coverage?

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Question: If I am receiving a Subsidy and become newly employed with an Employer that offers and Affordable Minimum Essential Coverage and continue being enrolled on Covered California for myself with or without my dependents, will I have to repay the subsidy?

Answer: Yes. If you continue Covered California coverage after becoming eligible for employer-based group coverage, you will have to repay any subsidy received after that point. Even without a subsidy, dual coverage is not allowed. It is your obligation to notify Covered California once your employer-based coverage becomes effective.


Dear Confused …

The PPACA and IRS do not necessarily get along well with each other. And CoveredCA is a whole different set of rules and procedures. The bottom line is that you probably owe most or all of the premium tax credits back to the government.

Why? Because MAGI, the determiner of eligibility for tax credits, is not figured on a monthly basis. It is a relatively inflexible annual amount. That number can only be fully figured AFTER the end of the year in most cases. If your “household of 2” had 2014 MAGI of $72,000, this is well over the 400% FPL limit that Congress provided for in the PPACA, and you and your husband are ineligible for any premium tax credits for 2014.

Your situation is somewhat analogous to that of a self-employed person whose monthly income and deductions fluctuates wildly over the course of the year. Most such persons are usually counseled to not take the APTCs, in order to avoid the possibility of having to repay them, knowing that if they are entitled to any tax credits at the end of the year, those moneys will be refundable, assuming the taxpayer has no other unpaid liability.

Phil wrote: “It is your obligation to notify Covered California once your employer-based coverage becomes effective”

The obligation to report employer-based coverage under the circumstances described is at the time of the employee’s first ELIGIBILITY, not the effective date. There is a difference.

An employee might be led to believe that if they simply choose not to be covered by the employer plan that they have no “effective date.” That’s why the key word is ELIGIBILITY.

My husband and myself signed up wih Covered California for coverage starting January 2014, as we both had lost our jobs and only had both our employment income. In April, 2014, my husband called them to say he go a job effective May 1, 2014 and was not going to be making any more premium payments. Now, we currently live out of state, and our 1095A shows our coverage ending May 31, 2014, not April 30, 2014, as it should be. Plus this 1095A shows we owe $1,204 for EACH month, January through May of 2014, they show, for a total of $6,020! My husband made $72,000 (my income is $0, no unemployment anymore) from the start of his job on May 1, 2014 through December 31, 2014, and we filed taxes jointly. I have been calling Covered California since July, 2015, this year, have spoken with 10 different people there, including Blue Shield Billing, trying to get an adjusted Termination Date, of April 2014, as they had me fax my husbands HIPPA papers showing we had employer coverage starting May 1, 2015, etc. they tell me they see the Appeal filed in the system but nothing has happened since i started this process in July this year! BUT now, after speaking to the last couple of Cov. ca employees and Blue Shield employees, they think there is no way we would owe that $1,204 per month to the IRS. They are all telling us that seems extremely high. Can you please tell us if that figure sounds right that we WOULD have to pay it ALL back because he got this job in May, 2015? I know we are supposed to pay something back, but this seems extremely high. Thank you so very much.

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