Do you have a health insurance plan through Covered California with financial assistance from the Advanced Premium Tax Credit (APTC)? That’s great news! But did you know that if your income changes, it’s important to report it immediately? This will ensure that you receive the appropriate financial assistance.
You must report income changes to avoid receiving too little or too much financial assistance. And that could mean paying back some or all of the financial assistance you received. So, keeping Covered California updated with any changes in your income is essential to avoid any unexpected bills down the road.
In this blog post, we’ll review how to navigate and report income changes to Covered California.
Understand what income changes need to be reported
If any changes in your income are expected to last more than 30 days, you should report them to Covered California. It’s important to keep them in the loop about any changes.
Examples of changes that should be reported include:
– Employment status (e.g., losing a job, starting a new job, changing from full-time to part-time)
– Changes in your income (e.g., receiving a raise or promotion, starting a new business, receiving rental income)
– Household size (e.g., getting married, having a child, someone moving in or out of your household)
– Changes in your eligibility for other types of insurance (e.g., Medicare).
Report income changes promptly
It’s always important to keep your health insurance information up-to-date, especially regarding changes in your income. By reporting any changes as soon as possible but no later than 30 days after the change occurs, you can ensure that your financial assistance is accurate and that you’re not overpaying or underpaying your monthly premiums.
In California, this is particularly important because it can affect your coverage with any health insurance provider, whether it’s Covered California, Medicare, or another plan. Updating your application or profile with income changes is a simple and quick process, and it can save you money in the long run.
Consequences of not Reporting Your Income Change?
If you don’t report the change, you may end up owing money to the IRS that you weren’t expecting, or worse, you may have to pay back some of the money you received in advance payments when you file your federal tax return. This is because your advance payments may not match the actual qualified credit amount.
What Happens if I make less than the income I reported
It’s important to accurately report your household income when filing your taxes to ensure you receive the appropriate tax credits. If you make less than the reported income, you may be eligible for a tax credit from the Advanced Premium Tax Credit (APTC).
For example, if you reported an expected income of $70,000 for the year but your actual income turned out to be $50,000, you would have received a tax credit of approximately $1000 if you had estimated your income correctly. However, you only received about $500 in tax credits each month because you overstated your income.
In this scenario, you would receive a tax credit worth $500 for every month that you and your family were on a covered health care plan. The tax credit you receive would be based on the $20,000 difference in your household income. You may accept this tax credit as a payment or apply it toward any taxes you owe for the previous year.
What Happens if I make more than the income I reported
Filing your taxes accurately is crucial. However, sometimes, we may unknowingly underreport our income while filing our tax returns. But what if you discover later that you earned more than what you reported? Well, the tables turn, and you may end up owing money to the IRS.
Suppose you reported your annual house income as $70,000. However, when filing your taxes, you realize your actual income was $90,000. This means that you received $500 a month more than you should have. In this case, you would have to pay back the overpayment for every month you have received financial assistance.
How to report your income changes
If you have encountered any changes in your income recently and are enrolled in Covered California, Reporting it as soon as possible is essential. Logging into your account and selecting the “Report a Change” button will allow you to report changes in your income easily. Still, if you have any questions about Covered California or find out that you are unable to finish this process. We at Skyline Benefit are always happy to assist you with any queries you may have. Our team of experts is well-equipped to help you navigate the complexity of Covered California and provide you with the best possible solutions.
Reporting changes in your income is crucial when it comes to maintaining accurate financial assistance for your healthcare plan. Whether you make more or less than your reported income, any changes should be reported as soon as possible to avoid any unexpected bills down the road.
Remember, you have 30 days to report any changes in your income to Covered California, so don’t delay. Doing so can ensure that your monthly premiums are accurate and that you’re not overpaying or underpaying for your health insurance. If you have any questions or concerns about reporting income changes to Covered California, don’t hesitate to contact them or us at Skyline Benefit, your trusted agent. Stay informed, stay updated, and stay healthy!
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