What Happens If I Underestimate My Income for Marketplace Insurance?
Underestimating Your Income. If you underestimated your income for the year, then the subsidy the government paid in advance to your insurer was more than it should have been. You’ll have to reconcile that by paying back the excess when you file your taxes.
How is the subsidy for health insurance calculated?
The amount of premium tax credit health insurance subsidy you were awarded is based on an estimate of your income for the year you’re receiving the subsidy. If the estimate matches what you actually make, you won’t have a problem.
What happens if you underestimate your income under the ACA?
Income is calculated as an ACA-specific version of modified adjusted gross income. If the estimate matches what you actually make, you won’t have a problem. But, if you get a raise, a bonus, an inheritance or other windfall, or your income varies from year to year, you could accidentally underestimate your income.
Do you have to pay back health insurance subsidies?
There, you’ll compare the amount of health insurance subsidy your health plan received on your behalf with the correct subsidy amount based on your actual income. If you received more in subsidies throughout the year than you were eligible for based on your actual income, you may have to pay back some or all of the extra money you got.
