[Updated on August 30, 2024.]
The ACA health insurance subsidy, aka the premium tax credit, is set up such that, for the most part, it doesn’t matter how much subsidy you receive upfront when you enroll. The upfront subsidy is only an estimate. The final subsidy will be squared up when you file your tax return next year.
If you didn’t receive the subsidy when you enrolled but your actual income qualifies, you get the subsidy as a tax credit when you file your tax return. If the government paid more subsidies than your actual income qualifies for, you pay back the difference on your tax return.
Repayment Cap
There’s a cap on how much you need to pay back. The cap varies depending on your Modified Adjusted Gross Income (MAGI) relative to the Federal Poverty Level (FPL) and your tax filing status. It’s also adjusted for inflation each year. Here are the caps on paying back the subsidy for 2024 and 2025.
| MAGI | 2024 Coverage | 2025 Coverage |
|---|---|---|
| < 200% FPL | Single: $375 Other: $750 | Single: $375 Other: $750 |
| < 300% FPL | Single: $950 Other: $1,900 | Single: $975 Other: $1,950 |
| < 400% FPL | Single: $1,575 Other: $3,150 | Single: $1,625 Other: $3,250 |
| >= 400% FPL | No Cap | No Cap |
Source: IRS Rev. Proc. 2023-34, author’s calculations.
No Cap Above 400% of FPL
The repayment caps in 2024 and 2025 apply only when your actual income is below 400% of FPL. There’s no repayment cap if your actual income exceeds 400% of FPL — you will have to pay back 100% of the difference between what you received and what your actual income qualifies for.
Large Change in Income
The caps are also set sufficiently high such that the amount you need to pay back will fall below the cap unless there’s a big difference between your actual income and your estimated income at the time of enrollment.
For example, suppose you’re married filing jointly and you estimated your income would be $50,000 in 2024 when you enrolled. Suppose by the time you file your tax return, your income turns out to be $60,000. Because your income is $10,000 higher than you originally estimated, you qualify for a lower subsidy now. You will be required to pay back the $1,596 difference. The cap doesn’t really help you because this $1,596 difference is well under the $3,150 repayment cap.
In addition, because you’re required to notify the healthcare marketplace of your income changes during the year in a timely manner so that they can adjust your advance subsidy, normally the difference between the advance subsidy you received and the subsidy you finally qualify for should be well under the cap. The cap helps only when your income increases close to the end of the year to make it too late to adjust your advance subsidy.
Easier for Singles
Still, a late income change can happen, and the change can be large enough to make the difference in the health insurance subsidy higher than the repayment cap. This is true especially when you’re single with a lower repayment cap.
For example, suppose you’re single and you estimated your income would be $30,000 in 2024 when you enrolled. Suppose in December 2024 you decide to convert $20,000 from a Traditional IRA to a Roth IRA. This pushes your income to $50,000. The extra $20,000 income lowers your health insurance subsidy by $2,866, but because your repayment cap is $1,575, you only need to pay back $1,575. You get to keep the other $1,291. In this case, you’re better off asking for the subsidy upfront during enrollment. If you only wait until you file your tax return, you won’t benefit from the repayment cap.
Bottom line: You should try to estimate your income conservatively and qualify for as much subsidy as you can upfront when you enroll. Maybe it won’t help. Maybe it will.
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GMShedd says
As usual, Harry, you’ve done an excellent job of analyzing a complicated set of rules, and then presenting them in such a way that others can benefit from your digging. I’ll add a couple of points of interest for others who buy ACA insurance, and who are in the income levels where the benefits become most variable. In the earliest years of the exchanges, the Silver plans were by far the best bang for the buck for those who had incomes that qualified for CSR’s, but in 2017 the Trump administration discontinued the payments to insurers as reimbursement for the lower deductibles and OOP maximums (without changing the law that required the insurers to provide them), so the premiums for the Silver plans have shot up as a result (higher than Gold and Platinum in some cases), because the effective ratio of premiums to paid-out benefits for Silver plans was no longer simply 70% for everyone as intended, but more like 95% for those getting the largest CSR, and probably <70% for those who aren't. People who don't qualify for CSR's are probably better off buying a non-Silver plan, where it's easier for the insurers to calculate the deductibles and OOP maximum that will yield a 60% (Bronze) or 80% (Gold) payout ratio. One other potential bonus of buying an ACA plan is that when insurers make too much profit (less than 80% of revenue actually spent on healthcare), they are required to rebate the excess to customers–even if most of the premium was covered by a PTC and not by the policyholder.
Brian says
A very good and interesting article; you highlighted many cautionary areas that people need to be aware of.
Our experience with the ACA: We were on the ACA from 2014-2018 and usually chose the lowest cost silver plan each year. Each year we carefully estimated our annual income and received the premium tax credit up front, always being careful not to go below the minimum income threshold. (We never had to submit any documentation to prove our income. I don’t recall our ACA insurance companies offering credit card rewards when paying the full premium up front.)
Our income estimates were usually quite accurate. However, in 2017 we exceeded our income estimate due to unexpected income towards the end of the year; but due to the repayment cap only had to pay back $1,500 of the excess APTC we had received. (Note that even though a portion of the APTC may have to be repaid, the CSR subsidies received do not have to be repaid. That’s a feature of the ACA that needs to be considered when applying.)
After we learned the ACA process, we found that by strategically pulling money from different financial “buckets,” we could (usually) hit whatever MAGI we were targeting. In 4 of those 5 years we were able to push our MAGI below 250% of the FPL to get a very good APTC and to qualify for the other CSRs that you mentioned.
A major hiccup occurred however, when in 2016 the ACA co-op insurance company we had signed up with went bankrupt. (https://www.google.com/amp/s/www.bizjournals.com/columbus/news/2016/05/26/ohio-shuts-down-states-obamacare-nonprofit-co-op.amp.html) So, mid-year we had to signup with another ACA insurance company, and in the process lost all out-of-pocket expenses we had made with that bankrupted insurance company.
All things considered, the ACA worked very well for us, and came at a time when we had retired early and needed affordable coverage to bridge us to our Medicare years (which we’re on now).
Again, an excellent article that all should take note of. Thanks!
Paul says
Harry, do repayment caps also apply to an individual who fails to report a life change in the middle of the year. An example would be becoming eligible for group health insurance at work in the middle of the year.
john says
Hi Harry,
1) I am running the numbers for Alameda county single person age 44. With a $30K income the deductible is $3700 and with $40K income the deductible is $4K. So the difference does not seem as large for Cost-Sharing Reductions?
2) Also if at end of year my income increases, does it change the deductible amounts of the plan? Eg: if my deductible was $3700 and now with new income in dec it should ideally be $4K; do I need to also pay back the plan for the deductible difference? Or is it only subsidy repayment with cap that I need to worry about.
3) I also noticed that Gold plans have no deductible. If I know some procedures are needed which will result in coinsurance; would Gold in such circumstances be the right plan considering the difference in premiums between Silver and Gold is still less than the deductible in Silver (while Gold has no deductible)
Harry Sit says
Cost-Sharing Reductions come in three tiers. You only get a small reduction at 250% of FPL. Larger reductions come in at 200% and 150% of FPL. You’ll see a larger difference when your income is $25,000 or $19,000. The CSRs don’t have to be paid back. If you notify the exchange of your higher income and there’s still time to adjust your plan, they’ll move you to a different plan going forward. It won’t affect your past. As GMShedd said in comment #1, if you’re not receiving the CSR or you’re only receiving a small reduction, the Gold plan can be a better value.
DM says
Hi Harry,
Very educational article! Thanks!
In 2019, I took full premium up front (around 13K total) assuming my 2018 AGI would be about the same at 25K. I also converted 30K from IRA to Roth. Unfortunately this transaction pushed my 2019 over 55K, and I was advised to pay back every penny of APTC = 13K. Does the ‘Payback Cap’ mentioned in the article applied in this case?
Harry Sit says
If you were a household of one person in the lower 48 states in 2019, $55k was above 400% of FPL. Your payback cap was unlimited. That’s why you had to pay back every penny of your premium subsidy. Had you converted $20k instead of $30k, you would’ve had a lower payback cap.
Dana says
Outstanding article! A question for you now along these lines. I went on Medicare last year and ended up with several months of “overlap” ACA insurance while on Medicare because of a miscommunication with the ACA. Assuming I am <400% of FPL for the year and the over-lap was $1500/mo. for three months, how is the amount that I must pay back calculated, assuming it must be paid back?
Thanks!
Kelly says
Very informative. I had a question regarding taxes. I had to repay all of my subsidy due to extra income from annuities, Social Security and IRA’s at the end of the year. Since I essentially paid the premiums by myself, can I include these costs as medical premiums if I itemize deductions on my taxes. Thanks!
Harry Sit says
You can, but if you aren’t self-employed, the first 7.5% of your AGI isn’t deductible. From the IRS:
https://www.irs.gov/taxtopics/tc502
Julia says
What if I only had a marketplace plan for 6 months of the year? Am I still responsible for paying back the full contribution based on my income?
For example, I made $32,000 and am expected to contribute about 9% or $2,880 per year to the cost of the health insurance premium. However, if I was only covered six months, shouldn’t this contribution be reduced to $1,440? I’ve prepared a tax return and it looks like I’m still expected to pay back the full cost of the annual contribution.
Harry Sit says
Yes, your expected contribution is prorated by the number of months. When you’re entering your 1095-A into tax software, fill out the month-by-month rows. If you read the instructions carefully, you’ll see you use the totals only when you were covered for all 12 months and the numbers for each month are the same.
Jennifer says
I made below income and recieved tax credit for 2 years. I now have no income and applying for SSI. I cannot afford any premiums and now am worried. I was not eligible for medicaid as I have no dependents. So now what? How do I obtain insurance with no or very little income?
Harry Sit says
Many states don’t require a dependent to qualify for Medicaid. If yours still does, maybe moving is an option?
https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/
Chris B says
Harry I have a horror story. My spouse and I both became unemployed in March. We informed the Market place of the income change to zero. I filed for unemployment, my spouse found temporary work with varying hours. We were not sure how much income either of us would make for sure. Unemployment was approved for $214.00 a week after taxes. But pandemic payments became unpredictable increasing the payments. After my 26 week unemployment ended, I informed the Market place of our income status. In November my spouse was offered full time employment. I told the Market place but the 10k made put us over the amount for subsidies. We now must pay back over 12000.00. We briefly stepped across the poverty line and now must pay a hefty penalty.
Kelly says
You may also be able to open up an HSA for you and your spouse.
Brian says
This isn’t insurance, but……Is there an FQHC (Federally Qualified Health Center) near you? Those centers provide health services on a sliding fee scale based on income, family size, etc.
They often provide services for individuals with no income if that can be verified (through a self declaration form or some other official agency records, e.g., written statement from a landlord or other person outside the household having knowledge of the applicant’s financial situation).
You should look into an FQHC in your community.
Brian says
You’ll have to do some careful math on this, but can you open a deductible IRA for just the right amount of dollars to lower your 2020 modified AGI enough to briefly step back across that threshold for subsidies and avoid having to pay that hefty penalty? Or are you too far above that threshold?
Karie says
Thank you so much for the article. I also have a horror story. My husband and I own an electrical contracting business. We qualified for the PPP loan last year. My husband and I don’t generally take a regular paycheck. I put us both on the payroll to satisfy the requirements of the PPP loan. We have been doing our taxes and have discovered we now owe $28,000 in penalties for the Obama Care Insurance. Please help! Is there anything we can do?
Karie says
Is there a chance I can now take that 28,000 and add it to my deduction on my health insurance premiums?
Harry Sit says
As Brian mentioned in comment #12, depending on how much your income is over the 400% FPL cutoff, you may be able to bring it below the cutoff by contributing $6,000 to a Traditional IRA for each of you ($7,000 each if both of you are 50 or over). That lowers your income by $12,000 or $14,000. And if your health insurance was an HSA-eligible plan (Bronze plan more likely), you can contribute another $7,200 to an HSA. That also lowers your income for the subsidy qualification.
Finally, yes, self-employed health insurance is deductible. If you’re using tax software, be sure to enter it in the right place. When your health insurance was that expensive, deducting part of the health insurance by itself may bring your income below the cutoff. See how to do it in TurboTax and H&R Block software.
Karie says
Or, could I put 26,000 into a 401K for 2020 and use it as a reduction of income for 2020?
Karie says
Thanks Harry! We have already contributed to our IRA for last year, if we put it into an IRA for next year would it still count towards lowering our 2020 income? We ended up at $99,000 on our income. There is just the two of us. We are over 50
Harry Sit says
A little late for the 401k if you didn’t already have one set up for your business before December 31, but you can do a SEP-IRA for each of you. You can contribute 25% of your respective payroll to the SEP-IRA. That also lowers your income for the subsidy qualification.
Harry Sit says
Contributing to a Traditional IRA for 2021 won’t lower your income for 2020. Look into the SEP-IRA. A household of two in the lower 48 states in 2020 needs to have income below $67,640 to receive a premium subsidy. Even though your $99,000 income is quite far from it, lowering your income by all means plus deducting some of your self-employed health insurance may still make you qualify for _some_ subsidy.
M Myers says
Was interested in knowing what happens when your estimated income ends up being higher due to unemployment payments and lottery winnings during 2020? Estimated income was $19,000 but ended up being $33,000. Will health care subsidy need to be paid back?
Harry Sit says
News reports said the forthcoming stimulus law will make $10,000 in unemployment benefits in 2020 not taxable. After taking that into account, if your actual income is still higher than your estimate, you will pay back part of the subsidy, subject to the cap.
Harry Sit says
Oh, wait. It looks like the entire repayment requirement will be waived for everyone for 2020. You keep whatever advance subsidy you already received no matter how high your income is. If you qualify for more subsidy because your income is less than you originally estimated, you can still get more. Hang in there for another week until the official text of the law comes out to know for sure.
Cindy says
We are a family of 4 with AGI of about $57,000 (2 married adults & 2 children).
We co-own a small business.
I’m always afraid that our business will show a larger profit (s-Corp) & we will have to repay the subsidy.
Is there a chart or slide scale that shows what a family of 4 qualifies for before repayment in each tier?
It worries me to the point I think of dropping insurance. Of course, I’d like to make more money in my business, but not if it ends up costing me in the end.
Harry Sit says
This calculator shows your estimated subsidy:
https://www.kff.org/interactive/subsidy-calculator/
You give your estimated income first, say $57,000. Then you enter a higher income, say $67,000. The difference between the two results is the amount you’ll need to pay back when your business makes more money.
That said, it looks like the payback requirement will be waived for 2020 and the subsidy formula will change for 2021 and 2022. The calculator will have to be updated to the new law, but it still gives you a general idea.
Keith says
Good information Harry. My problem is I retired in March 2020 and didn’t include this income when calculating my years income. Earlier you talked about your income is durning the time frame when recieving your ACA insurance. As of now I would pay back all my subsidies 8000. Should my tax man know what to file? Also sounds like we may not have to pay any back which is great news if it is true. Our tax office did let me know this news yesterday.
Harry Sit says
It’s true. You keep whatever advance subsidy you already received no matter how high your income was in 2020. If you qualify for more subsidy because your 2020 income was less than you originally estimated, you can still get more. Because the law is only a few days old, the IRS and the tax software vendors still need time to update their systems. Once that’s done, you can file your 2020 tax return and not have to pay back the subsidy.
Margi Sirovatka says
If you overestimate your AGI, I understand that the government refunds the premium tax credit – however it is my understanding that they do not refund any of the CSRs. For example, you may have paid an OOP of $9,000 (versus $1,000 if you had estimated your AGI accurately). You will never get back the $8,000 difference if you had indeed paid/met your OOP. Is my understanding correct?
Harry Sit says
That’s correct. If you have a shot in qualifying for the CSR, you should try to justify your lower income estimate and get it upfront. If your estimate turns out too low you’ll keep the CSR. If it’s too high you won’t get CSR retroactively.
Justin says
What would happen if i’m in a state that didn’t adopt the medicaid expansion and my income fell below the poverty level to receive a subsidy. In other words, I am on the line of making too little for a subsidy but i go ahead and claim the subsidy throughout the year. Will I have to repay the subsidy if my income drops too low?
Harry Sit says
If the ACA exchange accepted you at the time of enrollment and they paid the subsidy upfront to the insurance company and then your income unexpectedly falls below the minimum, you’ll still qualify for the premium tax credit. If you didn’t get accepted upfront at the time of enrollment, you won’t qualify for the premium tax credit on the tax return when your income is below the minimum threshold.
Sam says
Hi Harry,
Is your reply to comment number 18. still valid for year 2025.
If I do not make my estimated income and go below FPL, I do not have to pay back my Advance tax credit/subsidy.
Harry Sit says
That’s correct. You don’t qualify for the tax credit when your income was estimated to be above 100% of FPL at the time of enrollment but it ends up falling below if “You, with intentional or reckless disregard for the facts, provided incorrect information to a Marketplace for the year of coverage.”
Peg Sas says
Need advice for 2021 taxes with unemployment and Obamacare. Husband lost job Dec 2020, been on unemployment ever since but with his severance pkg he received 28 weeks of insurance thru former employer so it wasn’t until this month, June, that he signed up for Obamacare. We estimated our income (I work part-time an only cover myself for insurance) but I was reading something about “If someone receives unemployment benefits during 2021, their income will be treated as no higher than 133 percent of the FPL. (married file jointly I guess this is $23,169) This means that those who receive unemployment benefits can receive maximal subsidies for ACA coverage, including no-premium coverage.”
So if I said my income might be $26,500 and his 13,700 for a total of $40,200 what would that mean? And also another HUGE mistake I made was take out money accidently on margin in 2020 and had to repay Feb 2021 with $38,922 capital gains. We can put money in traditional IRA but how much will we need to in order to be under the 400% of $69,680.
Harry Sit says
If your job offers coverage for spouse and family members and the insurance meets certain standards, which most employers’ plans do, he’s not eligible for the premium tax credit if he enrolls in a plan through the ACA exchange. The government wants you to add him to your insurance.
Robert Grisham says
Hi. I just discovered your site and have been reading for the last hour. I’ve recently signed up for insurance through the marketplace. My income is commissions only, so I’ve stated my income pretty low. There is a very good chance that my income will be higher than the 400% of FPL (family of 4).
You stated in this article the following: “If your actual income exceeds 400% of FPL, there’s no repayment cap — you will have to pay back 100% of the difference between what received and what your income qualifies for.”
I have read in other places that there is a cap of 8.5% of MAGI. I’ve been looking at that as my worst case scenario of payback.
Do you believe that to be the case? As I said, I’ve only been on your site for an hour, but I’ve not seen anything about the 8.5%.
Thanks for the help!
Harry Sit says
The 8.5% is part of the formula that determines how much subsidy your actual income qualifies for. It’s the worst case if your low estimate gives you 0% in the formula and your actual income gives you 8.5%. See the example toward the end of this post:
2020 2021 2022 ACA Health Insurance Premium Tax Credit Percentages
Dave C. says
Harry,
Thanks for this information. I would guess there is a lot in the ACA that people don’t understand about how variations in estimated income can greatly affect what a person pays for a deductible, co-pays, etc. when choosing a silver plan with cost sharing reductions. When insurance agents are assiting low/moderate income people, they should be aware that modest changes in estimated income can mean large changes in the cost sharing reductions – especially from year to year since the cost sharing reductions can change significanly on any particular plan and between companies. So there is much more involved than simply having to pay back any advance premium tax credit (or get a refund) if the person’s income changes from what is estimated for the application.
As you said in response to comment #4, “The CSRs don’t have to be paid back.” That is, even if the person’s income rises above what is estimated. That is VERY important.
For example, on the Colorado Exchange plan finder (https://planfinder.connectforhealthco.com/), at the lower annual income levels ($20,000 to around $30,000), while the advance premium tax credit is gradually reduced as income increases, there is a huge difference between 2022 silver plan cost sharing reductions over that income range (and also from from 2021 to 2022 plans). With one major carrier silver plan for a single person, deductible going from $100 to $2300, maxium out of pocket from $2000 to $6950, and similar large differences in office visit and procedure copays. So as the estimated income level increases in that range, the cost sharing deductions decrease significantly.
Therfore, with low/moderate income people, an insurance agent (or person doing the application themselves) would be well served to specify as low an income as is reasonable on the application. For example, a person who had a taxable AGI that varied from $20K to $30K in the past five recent years should specify the lowest level of that range when applying to take full advantage of the cost sharing reductions. (Colorado’s “look back” period in their application actually allows the person to choose from two to five years of annual income.) The repayment of any excess advance premium tax credit may well be totally offset by the savings from the cost sharing reductions at the lower estimated income level.
Anita M says
Harry,
Can you tell me if I have this correct? When I signed up for ACA for 2021 my subsidy from the government was $1400/mo. I listed my income as $36000. It is just my husband and I. If I convert an IRA into a Roth and bring my income up to $60,000 and the 400% FPL is $68,960, does that mean I will only have to pay back $2700 of the premium subsidy?
Harry Sit says
That’s correct.
John says
Harry,
1) I assume the 400% FPL cliff is calculated after Standard deduction, IRA contributions and capital losses ($3K) are all factored in?
2) If ACA income declared was $40K and it now is $45,500; what are the pros and cons of doing IRA to Roth conversions to reach the $51,520 limit. Is the $1,350 repayment cap (single CA filer) the only amount to be paid?
3) Since interest payments, dividends, etc. are estimates as of now and if the finally tally pushes one above the 400% cliff; can the conversions be reversed next year before April to avoid paying the massive ACA premiums with loss of subsidy?
4) Any other tax strategies in terms of capitals gains to take advantage of the low income tax bracket am currently in?
Harry Sit says
The 400% FPL cutoff is on MAGI, which is basically AGI plus tax-exempt muni bond interest. It’s before the standard deduction. Use a tool featured in this post to evaluate the impact of additional Roth conversion and/or realizing capital gains:
Roth Conversion and Capital Gains On ACA Health Insurance
Roth conversion can’t be reversed.
Teresa says
Harry,
I was not aware of the 8.5% of MAGI cap on premiums that was added mid-year. My husband and I purchased health insurance on Washington’s marketplace (WAHealthplanfinder.org) and paid well over 8.5% of our MAGI on premiums. However, since our income is well above 400% of the FPL, I failed to check the box that said I wanted to be considered for credits when we originally enrolled for our plan. IRS Form 8962 does not appear to have any reference to the cap. Does this mean it’s too late to apply for this credit when filing my tax return?
Harry Sit says
Form 8962 references it on Line 7, which points you to Table 2 in the Form 8962 Instructions (page 9). If you use tax software or a tax preparer, the software will automatically calculate your eligible credit.
Teresa says
Thanks for the tip. I was able to easily complete this form and get the credit on my return. Hopefully they’ll extend this cliff negation in future years, especially since I know how to fill out the form now!
Toli says
Very thorough work. Two minor remarks: (a) the repayment caps predated TY 2020, and have been available since the early days of the ACA (the post could be misunderstood as suggesting they came about in TY 2020); (b) it is indeed best to estimate income conservatively and maximize the advance PTC payment, but if you experience an income surge at the end of the year (and esp. if your actual income may end up at or above 400% FPL), do estimate your repayment amount before the end of the year. That way, you’ll have more mechanisms at your disposal to offset the surge (i.e., beyond deductible retirement or HSA contributions which can wait until Apr 15) (e.g., realizing an unrealized capital loss by Dec 31); or, if you cannot bring your income back down, make an estimated tax payment by Jan 15 to avoid underpayment penalties and a cash crunch at filing time.
john says
for FY 2024/25 does the repayment cap STILL apply for those whose MAGI is > 400% FPL?
2) is there any penalty if multiple years one’s estimate of MAGI were say $30k when it ends up being $50-60k from the sale of something in early December?
possibly penalty for under-payment of estiamted taxes, or not being allowed to use the APTC for following years , or ? (I’m inclined to just allow my ACA plan to rollover, and not touch the ACA website, from past bad experiences.
Harry Sit says
There was never a repayment cap for MAGI above 400% FPL. I don’t know what the penalty is when you consistently exceed the income estimate you gave at the time of enrollment by a large amount or a large percentage. You should update your income after you realize a large capital gain. If you don’t want to use the website, you can call the toll free number or have a broker update the income for you.
john says
thanks for the reply, I had meant to ask, if for 2024/25 one is above 400% FPL, is there a repayment cap, or only for those below 400% FPL.
I’m wondering if the large capital gain, were in December, is that somehow different than doing it in January, with regard, to needing to register a “change in life circumstances” ?
re: the website, was referring more to the annual open enrollment period, where one declares income then picks a plan, one year, while doing that, I was surprised that all the sudden, my plan immediately changed, despite, it ostensbily being something I was declareing for NEXT year …
Harry Sit says
No repayment cap for income above 400% FPL. That’s the case in the past, present, and the foreseeable future.
No difference in when your income increases above your estimate, whether it’s in January, December, or any other month.
No difference in when you don’t want to use the website either, whether during open enrollment or outside open enrollment. You can call the toll free number or go through a broker.
John says
during open enrollment, when one estimates their income for the following year (2025), is that the same as registering a “change in income” for 2024 if it done Nov 1 through Dec 15 2024? I believe this happened to me years past, when I was immediately changed to a Medicaid program for the final month of the year, while doing what I thought was an estimate for the following year.
If so, and I’m doing an update to my 2024 income, in Dec, 2024, and it is also doubling as my income estimate for 2025, when it is meant only for 2024, when would I put in an a new estimate of income for 2025 or call it a “change in lifestyle” ?
And then possibly do the same thing in Dec, 2025, when I may or may not realize a lump extra income of $10-$20k ?
I wish it was less confusing. I’m trying to make a plan to get me to Medicare age.
Harry Sit says
When your income changes by a large amount between one year and another, call the marketplace customer service and tell them the two numbers. They can make sure to differentiate which income applies to which year.
Larry S says
Hi Harry,
Thanks for the informative and well-written discussion of repayment limits on PTC credits. It’s a subject that I have seen very little written about and none with the clarity you provide.
Your articles have saved me a good deal of money. In my situation my final YE MAGI income for 2023 was about $30K more than I initially projected. The calculated overpayment of my subsidy will be about $6,000 but because of the cap my repayment will be limited to $3,000. Nice.
Larry says
Hi Harry,
Is there a way I can determine what the cost of the SLCSP in my area is before receiving my 1095?
Could I review the ACA website for all (non-dental/vision) silver plans offered and just take the list price for whichever is the second lowest cost offered? That seems like an obvious answer, but I want to make sure that I am not missing something in the calculation.
Thanks for all you do to keep this information updated. I find this and other columns you post extremely helpful and make my financial life so much easier. Awesome.
Harry Sit says
That works. KFF’s Health Insurance Marketplace Calculator also works when you set a high household income (say $500,000). The displayed “Your cost for a silver plan” is the cost of the SLCSP. Both get you close but it may not be to the exact dollar. The exact cost only comes in the 1095 form.
Anita says
Not sure if this is the right place for this question but here goes.
What repayment cap would my husband and I use if I go on medicare in July and he continues on the ACA insurance? Would the repayment cap be for a single or married filing jointly?
Harry Sit says
Married filing jointly.