Reporting Changes to the Insurance Exchange
Today we will discuss the possible need to report changes if you are covered under an Insurance Exchange for health insurance.
If you have insurance through the Health Insurance Marketplace, you may be getting advance payments of the premium tax credit. These are paid directly to your insurance company to lower your monthly premium. Changes in your income or family size may affect your premium tax credit.
If your circumstances have changed, the time is right for a mid-year checkup to see if you need to
adjust the premium assistance you are receiving. You should report changes that have occurred since you signed up for your health insurance plan to your Marketplace as they occur.
Changes in circumstances include, but are not limited to:
An increase or decrease in your income
Marriage or divorce
The birth or adoption of a child
Starting a job with health insurance
Gaining or losing your eligibility for other health care coverage
Changing your residence
Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to reduce your monthly premiums.
Repayments of excess premium assistance may be limited to an amount between $300 and $2,500 depending on your income and filing status. However, if advance payment of the premium tax credit was made but your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation. Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.
Want to know how this affects your situation? Please send us an email by clicking here, or give us a call at (515) 225-3141.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein