Question: A am 25 years-old single person with Covered California Silver 87 Plan. I recently lost my job. I have a new job starting in January. I plan to use my 90-day grace period and stop paying my subsidized Covered California health insurance for the rest of the year. If so will I have to repay my subsidy?
Answer: When your Covered California coverage lapses after 90 days for non-payment, the subsidy which the feds paid to your insurance carrier during the 90-day grace period is returned to the IRS except for the amount covering the first 30 days of the grace period. When you file your 2017 federal tax return, you reconcile the total subsidy received. If more subsidy was paid than you was due, your federal taxes due will include any overpayment (or underpayment) of subsidies.