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Fri 18 Apr, 2014 09:28 am
I am self employed with a family of 5. The CHIP threshold is 200% of the poverty threshold which is around $55,000 for a family of 5. I anticipate making around 50-60k this year but it is impossible to predict exactly being self employed. When I signed up for Obamacare, it was trying to force my kids into CHIP (medicaid) if I estimated under 55,000. If I estimated more than this then it would allow my kids onto our policy. I decided to predict 60k for my income so that I was not forced to put my kids on Medicaid.
So here is the question that I have not been able to find an answer for. If I end up making less than the 200% threshold when I file my taxes, would I be required to pay back the subsidies because my kids were suppose to be on CHIP?
I was told by the insurance agent that if you end up making less than 133% then you do not qualify for Obamacare at all and would have to pay back the subsidy. However, they were not sure about what happens if you make less than 200% but have you kids signed up on your family insurance policy instead of the required CHIP program.
Also, by the same token, what if I predicted an income under 55k, signed my kids up CHIP, but then end up making more at the end of the year and they really didn't qualify for that?
@dsmith,
The regulations are are a bit confusing and seem to be constantly evolving but I don't think you would be required to repay advance premium tax credit payments if it turned out that your children were eligible for CHIP coverage but instead enrolled in a subsidized Affordable Care Act plan. There are income-based repayment caps so if you were required to repay any part of the subsidies, the maximum repayment amount in your case would likely be $600.
see Table 5 [Limits on Repayment of Excess Premium Credits Enacted by the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011 (P.L. 112-9)] on page 13 of the following document:
Congressional Research Service: Health Insurance Premium Credits in the Patient Protection and Affordable Care Act (March 12, 2014)
I also found a site that authoritatively answers these type of questions:
http://www.healthreformbeyondthebasics.org/premium-tax-credits-answers-to-frequently-asked-questions/
Quote:
What happens when someone living in a state that hasn’t expanded Medicaid receives advance payments of premium tax credits, because he thought his income would be over the poverty line, but ends up with income below the poverty line? Does he have to pay back all the advance payments he received when he files his taxes?
No. There is a special rule that applies in this situation. As long as the Marketplace estimated at the time of enrollment that his income would be between 100 and 400 percent of the poverty line and he was otherwise eligible for premium tax credits, he won’t have to pay back the advance payments he received during the year.
Source:
http://www.healthreformbeyondthebasics.org/question-of-the-day/
@dsmith,
If you get your kids on CHIP, your income will be checked to make sure that you meet the requirements to have it. I was helping a family whose monthly income shifted each time, so they sometimes qualified and sometimes did not. Enrollment in CHIP is open all year so you can always hop on that should your income go down. If you make more money and lose CHIP, then you qualify for a special enrollment period for the ACA and can choose a plan. Would this be irritating to do every month? Yes, but you could if you wanted. My advice would be to choose one and stick with it. If you are pretty sure that you will not qualify for CHIP at the end of the year, don't bother with it.
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