Does anyone have a chart that says how much a person would owe back, relative to their actual income for the upcoming year? Let's say a person says they make $15k and really make $0 with a subsidy of $250/MO. If they take the $0 silver, low deductible plan what are they really "risking". I would assume that they could be fradulent if they lied and the policy rescinded and claims not covered. How are people handling this situation? I usually walk away BC it isn't worth the risk but I have my medicare clients asking about their kids so it comes up more frequently.
Claw Back Calculation
- Thread starter kstein
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why not google it sweetie
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- #3
- 29,487
This was on another thread today.
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When you apply for Obamacare through your health insurance exchange, you need to estimate what your family income for 2014 will be. If you estimate it will be below 400% of the federal poverty level for a family your size, you will be eligible to receive a subsidy to help pay your monthly insurance premiums. The amount of the premium assistance is based on your estimated income and the amount of your health insurance premiums. This premium assistance can be worth thousands of dollars per year.
But what happens if it turns out you underestimate your 2014 income? If you already benefited form premium assistance payments, you’ll have to pay them back to the IRS when you file your 2014 income taxes. The amount you’ll have to pay back depends on your 2014 family income. If your 2014 income is below 400% of the federal poverty level, there is a cap on the amount you’ll have to pay back, even if you received more in assistance than the amount of the cap. However, at higher income levels, you’ll have to pay back the entire amount you received, which could be a lot.
The following chart shows how much individuals and families will be required to pay back.
Income, based on federal poverty level
Annual Household Income for an Individual
Individual Payback of Obamacare Premium Assistance
Annual Household Income for a Family of Four
Family Payback of Obamacare Premium Assistance
Less than 200%
Under $22,980
Capped at $300
Under $47,100
Capped at $600
At or above 200% to 300%
$22,980 – $34,470
Capped at $750
$47,100 - $70,650
Capped at $1,500
At or above 300% to 400%
$34,470-$45,960
Capped at $1,250
$70,650 – $94,200
Capped at $2,500
Greater than 400%
$45,961 and higher
Full amount received
$94,201 and higher
Full amount received
Example: Ernest, a 45-year-old single self-employed writer who lives in San Francisco, obtained health coverage through the California health insurance exchange (covered.ca). He estimated that his 2014 income would be $30,000. Based on his age and income, he qualified for a premium assistance of $216 per month, or $2,592. However, it turns out that Ernest had a better year than he thought he would: He actually earned $40,000 in 2014. Based on this income, he was actually entitled to premium assistance of only $109 per month, or $1,308. He received $1,284 more in assistance than he should have. However, he only has to pay back $1,250 because this is the cap for people at his income level. Had his income been $46,000 or more, he would have to pay back the entire $2,592.
One way to avoid having to pay back all or part of your Obamacare premium assistance is to report to your health exchange any changes in your income during the year. The exchange can adjust downward the amount of premium assistance you receive for the remainder of the year.
Another way to avoid having to repay all or part your premium assistance is to elect to have all or part of your premium assistance sent to you as a tax refund when you file your tax return, instead of paid in advance to your health insurer during the year. In other words, you pay the entire amount out of your own pocket during the year, and then you are reimbursed by the amount of premium assistance you qualify for.
For details, see your health insurance exchange. Links to your state exchange are at healthcare.gov.
by: Stephen Fishman, J.D.
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Here's the link, it's easier to read.
Obamacare Tax Credits: The Pay Back Requirements For Underestimating Annual Income | Nolo.com
- 29,487
Don't worry about it. You gave it your best shot.
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Thanks G52--that was very informative. I try to stay away from ACA, but do a small amount, and this helped me to help others. Thanks for such a good post, as I almost went digging into the depths of hellish info to find it.
No problem. I just copied it from another thread...can't remember who posted it.
IndianaHealthAgent
Expert
- 26
there is a kff.org white paper on this as well that is pretty helpful.. I don't have it handy but if you can't find it let me know and I'll dig it up.
- 8,448
The subject of "claw-back limits" gives me goose-bumps for some reason.
See Page 5 for a very plain chart at: https://c.ymcdn.com/sites/kypca.sit...E_Enrollment/1095-A_Quick_Reference_Guide.pdf
Do geese have bumps?
See Page 5 for a very plain chart at: https://c.ymcdn.com/sites/kypca.sit...E_Enrollment/1095-A_Quick_Reference_Guide.pdf
Do geese have bumps?
- Thread starter
- #10
