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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.


Will My Flexible Income Cause Me to Get Shorted on Subsidy?

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Question: My income will vary next year. Let's say i think i will make $40,000 next year and my covered calif. premium is $265 a month. But after the year ends i find out i only made $35,000 which would mean my premium would of been $199 a month. Will i get a refund then since i overpaid on my premiums compared to what my actual income came out to be

Answer: You will get every penny of subsidy due you based on your income. Income fluctuations from month to month get ironed out at the end of the year when you file your tax return. The IRS computes your total premium assistance on an annual basis at that time based on your adjusted gross income. You add up all the premium assistance your received during the year (Form 1095A) then match it against the IRS computation. If you did not use all the premium assistance you were due for the year, you will get the difference as an additional tax credit against your federal taxes due. Conversely, if you received too much premium assistance, given your final annual adjusted gross income, you will pay the difference as added tax to your federal income tax.

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