Reporting Changes in Income to Your Health Insurance

So you enrolled in a Covered California health plan, Medicaid, or another type of federal health insurance in California. 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 in Covered California, you agree to report any changes, such as an income change, within 30 days. What should you do if your income falls into a different income level and you did not report the change?

If you’re a California resident who has had a recent change in income, use this guide to learn how to properly report income changes across various health insurance providers in California.

What It Means to Report Income Changes

When you’re enrolled in a health insurance plan, it’s important to keep your profile or application updated with any major life changes, including:

• Changes in household size
• Changes in marital status
• Changes in property
• Changes in income

By reporting circumstance changes to health insurance in California, you can avoid overpaying or underpaying for your monthly premiums and adjust your coverage accordingly. No matter what health insurance plan you’re enrolled in, such as Covered California, Medicaid or another health insurance provider, you should update your application or profile with income changes as soon as possible. You must indicate what your annual income will be for the benefit year because the premium assistance you may receive is determined by your modified adjusted gross income (MAGI).

Annual income can fluctuate greatly for many people, including those who are self-employed or paid by commissions. However, there are some types of income changes that you may not need to report, such as child support received, inheritance, educational scholarships or housing a teenage child who only earns a certain amount. Keep in mind that income change reporting guidelines may be different for each provider in California, so it’s critical to read through your plan thoroughly.

When Should You Report Income Changes?

One of the most common questions people have when it comes to reporting circumstance changes to health insurance providers is whether there’s a specific timeframe to do so. The answer is yes! As soon as you’re aware of your income changes, it’s important to report it to your health insurance provider, such as Covered California, Medicaid or your Federal Marketplace provider as soon as possible. Depending on the plan you have, you will have different requirements for reporting.

For example, for those under Medicaid in California, also known as Medi-Cal, you must report your income changes within 10 days. If your income changes result in an adverse action, you will receive a 10-day Notice of Action (NOA). For those who pay for health insurance through Covered California, you must report income changes within 30 days.

What Happens if You Don’t Report Your Income Change?

Once you know your income has changed, you need to update the changes immediately, or as soon as possible within the limited amount of days determined by your California health insurance plan. If you don’t report the change, you may have to pay back some money when you file your federal tax return because your advance payments may not match the actual qualified credit amount. Additionally, if you don’t report your income change within the required time frame, it may affect what you’re eligible for in terms of savings and coverage.

Essentially, the amount you earn directly impacts the amount you pay for your health insurance plan. As such, if your income changes, by either a decrease or an increase, you’re obligated to report this change so your health insurance provider can adjust your plan accordingly. If you neglect to make a report, you could be missing out on potential savings that you now qualify for or end up owing money that you’re not expecting to pay.

Though many people tend to procrastinate with this task because it can be tedious, reporting your income as soon as possible can prevent any financial surprises down the road and help you save money before the renewal season if you end up eligible for financial assistance. If your income changes do not qualify you for special enrollment, you may still be given the option to adjust your monthly payments.

How Increases and Decreases in Income Will Affect Your Insurance Coverage

Though you need to report changes in income regardless if it’s an increase or decrease, there may be different impacts on your health insurance payments and coverage. For example, if your annual income goes up or you lose a family member that was part of your household, you may qualify for less savings than you’re currently getting. However, if your annual income goes down or you add a new dependent or family member to your household, you may qualify for more savings than you’re getting now.

A decrease in income can lower what you pay in monthly premiums or potentially make you eligible for free or low-cost coverage, and help you save on out-of-pocket expenses, like copayments and deductibles, through certain health insurance programs like Medicaid.

How Will This Income Change Impact Your Advanced Premium Tax Credit?

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 to receive. Be sure to file your taxes on time to receive any tax credits that are due to you.

If your income drops below 133% of the Federal Poverty Level and you become Medi-Cal eligible, will you have to pay back your APTC? Generally, no. You will not have to repay the premium assistance you receive if your income is verified as eligible at one point and later you become Medi-Cal eligible, as long as you report the income change within 30 days. It is your responsibility to report this change to Covered California so you can be switched to the appropriate program.

How to Report Your Income Changes

As with applying or enrolling in health insurance, some providers and health plans may ask you to submit documents to confirm your income when reporting a change, so be sure to have the necessary documents ready. Below, we’ll show you how to report income changes for various health insurance providers.

For Marketplace or Affordable Care Act

The Marketplace, or Exchange, is the Federal Health Insurance Marketplace where citizens can view and compare various health insurance plans under former President Obama’s Affordable Care Act (ACA), also known as “Obamacare.” If you’re enrolled in one of these plans, follow these steps to make an income change report:

• Log in to your Marketplace account and choose the application for the current/benefit year.
• Choose “Report a life change” on the left side of the menu.
• Click the “Report a life change” button.
• Update your income.
• Review the steps to verify your application information and confirm your selected plan.
• Be sure to click all the way through to the last screen to ensure your changes take effect.

For Marketplace plans, you can also update your income by phone or in person. Please Note: If you have IRS tax questions about how the ACA 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.

For Medicaid or Medi-Cal

When reporting income changes to Medicaid or Medi-Cal, you’ll need to contact the California Medicaid office either online or by phone. The assisting agent will tell you what documents you need to confirm your income status change and will let you know if these changes affect your eligibility. You can also report income changes to the federal government through HealthSherpa or HealthCare.gov to learn if you qualify for other coverage.

If you’re enrolled in either of these health plans, you can simply log into your account to report the change or wherever you originally enrolled. However, keep in mind that even if you report to HealthCare.gov, you still need to confirm your income changes to the California Medicaid office.

For Covered California

Reporting income changes to Covered California requires 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.

Request a Quote for Covered California Health Insurance From Health for California

Whether you need to learn more about reporting significant life changes to your health insurance provider in California or need help affording health coverage as a result of your income changes, Health for California can assist you. We can help you determine whether you qualify for a Medi-Cal or subsidized plan due to your income changes or current household circumstance.

If you’re currently insured and want to make a switch or learn about your eligible monthly payment options, get a quote today.