Earlier this month marked the deadline to verify income to avoid losing, or having to pay back federal health insurance subsidies under the Affordable Care Act (ACA or ObamaCare). 300,000 people are expected to be affected by this income verification problem, and will be paying back subsidies to the government.
The big problem? Most people are not aware that they received advance tax credits under ObamaCare, but they will still be responsible for paying the government back.
During the 2015 tax season, Americans will be expected to pay back any subsidies they received, for which they were not eligible.
Are you at risk?
People at risk of having to pay back subsidies include:
1. Those who obtained coverage on HealthCare.gov, and did not provide additional income information that melds with IRS data; and
2. Those whose income changed during the year, and who failed to update their information.
An additional 115,000 people may lose their existing coverage for failure to provide the required documents verifying citizenship or immigration status.
Note – the deadline applied only to applicants who purchased coverage on the federal marketplace. However, hundreds of thousands of additional people who got health coverage through state exchanges could also be receiving subsidies for which they are not eligible.
But what will this cost you?
Certain low earners may face limited repayments ranging from $300.00 to $2,500.00, but higher earners will have to pay back the subsidies in full.
If you fall into one of the above categories, you may be able to deduct some, or all, of the repayment from your 2015 tax refund. If you are not expecting a refund, or if your refund is not enough to cover the repayment, you can expect to write a check to the government.
♦◊♦
Are you looking to cut through all the noise and find out what ObamaCare really is, what it does, and, most importantly, what it means to you? MyHealthSpin’s “Easy Healthcare: ObamaCare” ebook guide leaves the politics behind and gives you a straightforward, timely rundown of the changes the law made and whether or not they impact YOU.