As the first full year of the Obamacare tax season came to a close on April 15, 2015, nearly two-thirds of subsidy recipients were hit with a bill for overpayments of the Advance Premium Tax Credit for calendar year 2014, according to an H&R Block analysis. This was due to the fact that those who got subsidies under-estimated their income for tax year 2014.
Under the ACA, those with incomes under 400% of the Federal Poverty Level are eligible for help paying their premiums. This help comes in the form of the Advance Premium Tax Credit (APTC). The APTC is compared to actual income when individuals get their taxes done for the prior tax year, and any amounts paid via the APTC that is higher than that person is entitled to is then collected by the IRS when they file their taxes.
In our experience, we are finding that some of the advice coming from NY State of Health when clients call in requesting help reporting their income is inaccurate. For example, we have been told by NYSOH representatives on multiple occasions that if you lose a job and are no longer getting a paycheck, that you will be eligible for Medicaid. That is false, as APTC and Medicaid eligibility is based on TOTAL income year to date and not just income from today onward.
Most of the repayment issues noted in 2014 by H&R Block can be avoided if you follow these two simple guidelines:
- Keep your INCOME up to date on your NYSOH portal.
- Make sure when you apply for coverage that you list ALL income you receive, including unemployment, alimony, and any past income YTD. This can be done by choosing ‘Inconsistent/Seasonal’ and inputting prior income under this heading. By not including any past income YTD, you will be UNDER reporting your annual income.
By making sure to accurately document your income and keep it up to date if there are any changes on your NYSOH portal will help you avoid any unpleasant tax surprises next tax year!
** Peak Advisors Inc and James Eckardt are Authorized brokers on NY State of Health.