Do I Have To Repay Premium Tax Credits If The Marketplace Miscalculated Them ?

Great answer via Kaiser News:

This week I answered questions from readers who are running into difficulties with premiums and tax credits on their marketplace plans.

My 63-year-old husband has Alzheimer’s disease. Our annual income is $41,000, from a combination of his Social Security disability insurance (SSDI) and a disability policy he had from a previous job. Last year I bought a single policy on the health insurance exchange. My husband gets coverage through the Veterans Administration. The monthly premium was reduced by a $278 tax credit based on our estimated annual income. Now I’m reviewing IRS form 8962 that’s used to reconcile what we received in premium tax credits against what we should have received based on our actual income. It looks like we’ll have to repay $2,500! We can’t afford that. If the marketplace made a mistake in figuring our tax credit, do we still have to pay the money back?

error calculator 570If you received too much in premium tax credits, you’ll generally have to pay some or all of it back. Health policy experts say they know of no provision in the health law or rules that would excuse someone from repayment if  an error that resulted in a tax credit overpayment was made by the online marketplace. An administration official didn’t respond to a request to clarify whether those situations would be handled differently than if someone underestimates their own income and receives too much.

The amount you’ll have to repay is capped based on your income. A couple with an income between 200 and 300 percent of the federal poverty level ($31,460 to $47,190 for a family of two in 2014) would have to repay up to $1,500. (People with incomes above 400 percent of poverty –$62,920 for a couple — would have to repay the entire amount.)

It’s hard to know if or where an error occurred. It’s possible that you or the marketplace calculated your income incorrectly. SSDI counts as income when figuring your eligibility for premium tax credits, but disability insurance payments received from an employer policy may or may not count as income depending on who paid the premium, says Karen Pollitz, a senior fellow at the Kaiser Family Foundation (KHN is an editorially independent program of the foundation.)

Perhaps you or the marketplace entered information incorrectly, transposed figures or made some other manual or computer entry error.

By early February you should receive Form 1095-A from the marketplace detailing how much you received in tax credits for reconciliation purposes. It will be important to use that to make sure your calculations on Form 8962 are correct.

If you discover there was an error in your premium tax credit last year, you’ll still have time to sit down with an agent to go over your 2015 coverage choices before open enrollment ends Feb. 15.

http://kaiserhealthnews.org/news/do-i-have-to-repay-premium-tax-credits-if-the-marketplace-miscalculated-them/