Question: A twenty seven year-old friend moved from California to Oregon, and failed to report the change of residence within the ninety day grace period. She works part time at a minimum wage job. Will she have to repay her California subsidy in order to move ahead in her new state?
Answer: No. She can buy coverage through the Oregon Health Insurance Exchange as soon as she is a resident. Since the subsidy is paid by the IRS, not the state of California or Oregon, her 2016 federal tax return will reconcile the total advanced tax credits (subsidy) received in both states. If more subsidy was paid than she was due, her federal taxes due will include any overpayment (or underpayment) of subsidies for the 2016 tax year. When her Covered California health insurance lapses after 90 days, the subsidy which the feds paid to the insurance carrier during the 90-day grace period is returned to the IRS except for the amount covering the first 30 days.