California healthinsurance-Covered California Questions -What if my Income Changes Income is a key driver of health subsidy eligibilityunder the new ACA (Obamacare) rules.. California has a very dynamic economy and people areconstantly moving in and out of the workforce (not tomention increases and reductions in hours or pay). Very few households have fixed incomes that remain thesame from year to year. How does the new Californiahealth exchange address changes in income as it pertainsto health subsidies? This a good and quite commonquestion so let's jump in. You can always run your quote here:
There will becitizenship, residency, and group health insurance (ifoffered) rules but income is really the main qualifierfor whether you will receive a subsidy and for how much.
Quick summary of health subsidy income eligibility
The health subsidy is basically available to people(households really) that make between 138% and 400% ofthe Federal Poverty Level (CoveredCa Income Table) and it is applied on a slidingscale.
They actually got rid of the top cap (400%) and it's just base on capping your contribution at a certain % of income.
If you fall within this range, you may beeligible for a health subsidy.
This brings up thequestion, what period of income do they look at?They basically ask for a best estimate ofthis year's income.
When you complete the online enrollment, they ask you toenter your various income sources on a current basis.
These amounts may be very different from last year oreven last month (loss of income, promotion and raise,etc). What should you do if your income changessignificantly (plus/minus 10%) from your original dataentry in the Covered California?
Updating Income data in the California health exchange
When you first enroll in the Health Exchange inCalifornia, you essentially create an ongoing accounttied to you.
At any time during the year, you can log inand update information and income levels are definitelypart of this updating process.
If we create the account for you, you can just email usupdates and we'll handle all the work on this side.
In fact, it's required that you update any changesin income data immediately within the system.
Thischange in data will immediately affect the subsidyavailable to you either on a monthly basis or annuallyat tax time the following year. Let's look at the sliderfunction for determining how and when you will take anysubsidy.
TheCalifornia Health Exchange Subsidy Slider
TheCalifornia Health Exchange Subsidy SliderWhen enrolling or updating information online, you aregiven flexibility in how you can choose to receive anyavailable subsidy.
You can choose to take the fullamount as a monthly deduction (divided by 12) to reduceyour immediate out of pocket premium.
You can alsochoose to take none of the subsidy up front andcollected subsidies available to you at tax time duringthe following year.
You can even use their sliderfunction to find some middle ground.
Why wouldn't aperson take the full subsidy right away?
Changes inincome or the potential for changes in income are a keyfactor.
Income increases during the year
What if you enroll in a California exchange plan inJanuary based on expect income of $25K which wouldqualify you for a subsidy if you meet the otherrequirements.
In April, you change jobs which results inyour income going up to $35K.
This amount is still underthe 400% of the Federal Poverty Level so a subsidy isstill possible the amounts will definitely change (godown based on higher income).
In April, after receivingthe change in income, you would want to login to youraccount and update the income to reflect this.
What if you want to be conservative in case income goesup?
You may not want to take the full subsidy up frontbecause your current income is lower than usual (youmight be paid seasonally or by commission).
In thiscase, you can use the slider to reduce the monthly or"advanced" tax credit.
You will pay more in premiumbut you will also not potentially have to pay back part(or all) of the subsidy at tax time.
Keep in mind that if you receive subsidies based on acertain entered amount that you were not eligible for,you will likely have to repay this amount (or apercentage of it) back during tax time.
You can access the online application here:
If income drops during the year
If you experience a sizeable drop in income (10% orgreater), update your income level.
We can do this for your easily to avoid the issues that can occur (cancels current month of coverage, etc). Just deligate us for the account. There's zero cost for our assistance!
You may qualify fora more subsidy or even qualify for any subsidy if youwere right on the income 400% level. It's best to keepthis information as current and accurate as possible toprotect yourself.
Check out the following:
- Self employed income for Covered California
- Guide for tax credits with Covered Ca
You can run yourCovered CaliforniaPlan Quote here to view rates and plans side by sidefrom the major carriers...Free.
Again, there is absolutely no cost to you for ourservices. Call 800-320-6269 Today!
