What Happens if I Don’t Report My Income Change to Covered California?
by Wendy Barnett
So you enrolled in a Covered California health plan. You applied for a plan with a significant premium tax credit, you paid your first premium and received your medical cards, and you think you’re all set. Not so fast! You will also need to keep track of your household income in case it changes during the year. When you enroll on Covered California, you agree to report any changes, such as an income change, within 30 days. So what happens if at the end of the year your income falls into a different income level and you did not report the change?
If your income is higher than you thought it would be, you will have to pay your advanced premium tax credit (APTC) back! This means that if you were receiving all of your APTC throughout the year based on a lower income, then you actually received too much assistance, and you will have to pay it back. However, the amount you must pay back will be capped at a certain amount based on your annual household income.
If your income is lower than you thought it would be, you will receive a refund when you file your taxes for any premium assistance that you were eligible for, but did not receive. Be sure to file your taxes on time in order to receive any tax credits that are due to you.
If your income decreases below 138% of the Federal Poverty Level where you become Medi-Cal eligible, will you have to pay back your APTC? Covered California’s answer is “Generally, no. If your income is verified as eligible for premium assistance and then later you become Medi-Cal eligible, you do not have to repay the premium assistance you received as long as you report the income change within 30 days. It is your responsibility to report this change to Covered California”. This way you can be switched to the appropriate program. Consequently, it is important to report the income change within 30 days or there could be other repercussions.
You can report a change on your Covered California account by logging into your account and clicking on the “Report a Change” button. If you don’t have access to your Covered California account yet, you can create an account with your own username and password and link it to your already existing account. Remember, as your health insurance agent, we are happy to assist you with any questions you may have. You can reach us by calling 1-877-752-4737 or emailing us at firstname.lastname@example.org.
Please Note: If you have IRS tax questions about how the new Affordable Care Act will affect you and your taxes, you may find answers at www.irs.gov/aca or you may want to contact a tax professional for more details.