If you are concerned about your Obamacare Subsidy in 2018 or 2019 contact The Mair Agency today at 919-459-2683. We can help you better understand what subsidy you qualify for. We can also help you find a health insurance plan that is best for you.
The main reason someone would owe back their subsidy is because their tax return for the policy year did not match up with the income they estimated on their application.
The subsidy is an advanced tax credit. When a person applies each year, they are supposed to estimate their Modified Adjusted Gross Income (MAGI) for that coming year. The subsidy amount offered is based upon the Federal Government’s Poverty Level (FPL). A subsidy would be offered if a person’s or family’s household income falls between 100% and 400% of the FPL. When the person files their tax return for that policy year the subsidy is then reconciled. If a person had estimated their income to be lower than it was, then they may have been offered too much of a subsidy (advance credit) which they now owe back. On the other hand, if there income was less than what was estimated then the government may owe them back some credit and they could have taken a larger subsidy. In essence, if the final MAGI falls below or above the FPL, then no advance credit should have been given. All of this is predicated on the number of people in the household on the same tax return as listed in the chart below.
Even though some people receive a set income and a W-2 when they apply, there could always be some other circumstances that cause the final income for the year to vary. Some examples are:
- Loss of employment
- Raise or additional overtime pay
- Profit from investments that were not considered
- Income from capital gains
- Income from an inheritance or lottery winnings
- Adding or Removing dependents from your tax return
Additionally, if a person fails to file and reconcile their tax return each year, they will lose their subsidy. This audit is usually done after the first quarter of the year, so if no return is received the subsidy would usually be dropped around April of the current year. This has caused many people to lose the affordability and therefore drop their coverage.
| Persons in Household | 100% FPL | 138% FPL | 250% FPL | 400% FPL |
| 1 | $12,060 | $16,642 | $30,150 | $48,240 |
| 2 | $16,240 | $22,411 | $40,600 | $64,960 |
| 3 | $20,420 | $28,179 | $51,050 | $81,680 |
| 4 | $24,600 | $33,948 | $61,500 | $98,400 |
| 5 | $28,780 | $39,716 | $71,950 | $115,120 |
| 6 | $32,960 | $45,484 | $82,400 | $131,840 |
| 7 | $37,140 | $51,253 | $92,850 | $148,560 |
| 8 | $41,320 | $57,021 | $103,300 | $165,280 |
| 9+ | If your household is larger than 8 people, add $4,180 for each additional person. | |||