What Happens if I Don’t Report My Income Change to Covered California?

Posted: June 27, 2024

Life is anything but constant —  job and lifestyle transitions occur all the time, and income changes often accompany them. Knowing when and how to report income changes to insurance providers helps determine your eligibility for coverage and savings.

When you enroll in Covered California, you need to report any changes, like earnings adjustments, in 30 days. Learn more about the reporting process so you can continue receiving quality health coverage and avoid financial penalties for noncompliance.

Why Should I Report Income Changes to Insurance?

Updating your Medi-Cal application with your new income is essential for compliance and ensures better benefits for you. Some perks of reporting your change include:

• Correct coverage: Reporting your income change from the onset helps clarify if you are still eligible for Medi-Cal or need to explore other options. Taking the time to ensure correct coverage will help eliminate stress in a medical emergency.
• Reduced penalties: By indicating income changes timeously, you avoid penalties such as fines or repayments. It only takes a quick update to your application to eliminate any costly surprises.
• Accurate premiums: Your income will determine your contribution to deductibles, coinsurance and copayments. Reporting income changes when they occur prevents you from paying too much or too little each month.

The Penalty for Not Reporting Income Changes to Covered California

Between busy work schedules and family commitments, finding the time to tackle everything on your to-do list can be challenging. However, reporting your income change to Covered California is a task you need to prioritize. Forgetting to submit your income change could result in penalties such as:

• Coverage exclusions: States run periodic checks to determine whether you are still eligible for Medicaid. They can see if you earn above the income threshold and can cease your coverage.
• Costly repayments: Your account will be in arrears if you pay a lower premium despite your income change. This means you will be liable to pay back the insurer.
• Legal consequences: Failing to report an income change is considered fraud and, as such, you may face criminal consequences.

What Changes Do I Need to Report?

Aside from indicating a higher or lower income change, you must report changes to your family setup or location. Changes to disclose include:

• Changes to your relationship status, such as getting married or divorced.
• Adding or losing a dependent, including adopted children.
• Moving to a new residence.
• Alterations to your immigration or citizenship status.
• Disability changes and whether they impact your ability to earn an income.

How to Report Income Changes to Medi-Cal

You will likely need to report income changes if you’ve received a promotion or decreased your hours. Here’s the best way to go about it:

• Prepare documentation: Pay stubs or employer records accurately indicate your earnings. Be sure to submit these documents when you file your income change.
• Report the change: You can report income changes via the online portal, phone, mail or in person — all methods are effective.
• Await notifications: Once you’ve reported your income change, look out for a letter confirming your new policy requirements.
• Explore enrollment periods: If your Medi-Cal ends, you can apply for a Marketplace plan. These plans cover urgent care, prescription drugs, hospital stays and more.

Frequently Asked Questions

When navigating the ins and outs of Medi-Cal, you’ll likely have some questions. Consider these responses to some of our most common queries:

Which Income Changes Require Me to Pay Back My Advanced Premium Tax Credit (APTC)?

If your income is higher than you initially thought, you will have to pay back your APTC. In other words, if you received all of your APTC throughout the year based on a lower income, you received too much financial assistance and will have to pay it back. However, your annual household income will determine the amount you owe.

Say your earnings come in lower than your initial calculations. After filing your taxes, you’ll receive a refund for any premium assistance you were eligible for but didn’t receive. File your taxes on time to receive any tax credits due to you.

What Makes Me Eligible for Medi-Cal?

If your income decreases below 138% of the Federal Poverty Level, you will be eligible for Medi-Cal. You can then apply for one of the Covered California plans and receive the health care you need.

Partner With Health for California and Report Changes Today

It’s in your best interest to report income changes to Covered California as soon as they occur. You can report a change 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 existing account.

Health for California is a health insurance agency dedicated to helping Californian residents receive affordable medical coverage. We understand that you may have some queries about what changes to report and how to navigate the process — our friendly team is here to assist you throughout the process!  You can schedule a consultation online or reach us by calling 1-877-752-4737.

If you have questions about how the Affordable Care Act will affect you and your taxes, you can find answers on the IRS website or contact a tax professional.