No matter how you feel about the Affordable Care Act (ACA), it’s in your best interests to at least understand how it works as well as how any subsidy you received through the ACA works. Knowledge is most certainly power, and it could be just the thing to keep you out of financial hot water. Sackett & Associates Insurance Services wants you to know how changes in your income or family size impact your taxes and subsidy.
The first thing you should understand about a tax subsidy is that it’s essentially an advance that’s applied to your health care coverage premiums. The amount of the subsidy you receive is determined by the income estimate and family description you noted on your Health Insurance Marketplace application. If you overestimated how much of a subsidy you would need, you’ll have to pay back the extra amount. If you underestimated, you’ll receive the difference in the form of a refundable credit after filing your income tax return.
Keep in Touch
To avoid cutting the IRS a check when tax season rolls around, it’s best that you keep your health insurance broker in the loop on any changes to your income or your family as soon as you’re aware of them. This way, the Health Insurance Marketplace can make the necessary changes to your information and adjust your subsidy accordingly. Not only should you tell your broker if your income or family size changes, you should also inform her or him if you get a job-based insurance plan starting or if you become eligible for Medicare coverage. Just make sure you’re clear about whether you’ll have to pay a penalty for not having coverage.
The California health insurance experts of Sackett & Associates Insurance Services are readily available to answer any questions you might have about the Affordable Care Act and health, vision, dental and live coverage plans. Call us at 707-823-3689, like us on Facebook and feel free to subscribe to our blog for trusted health insurance information.