Personal Finance (Not Investing) • Coveredca subsidy [Covered CA]

Hi everyone,

I’m new here and this is my first post. I joined this forum because I have a question that’s been causing me a lot of anxiety, and I’m really hoping you all can help me out.

There’s a lot I don’t know about this topic, so please bear with me. English isn’t my first language, so I apologize in advance if I don’t use the right terms. I’m grateful to anyone who takes the time to respond and help me out with this.

I'm 61 yo and single. I work hourly and my MAGI is in the region of $62,000, which is $3,680 over the 400% of the federal poverty level (FPL). My concern is that being above the FPL I've to pay back all Advance Premium Tax Credit (APTC) I received through CoveredCa when I file 2024 taxes, which is $9,358.44.

Searching on line I found out this

Updated Information on APTC Eligibility:Removal of the 400% FPL Cap:

Legislative Changes: The American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022 have temporarily removed the strict 400% Federal Poverty Level (FPL) cap for APTC eligibility. This change is in effect through at least 2025.
Impact on APTC Repayment:

No More "Subsidy Cliff": Previously, exceeding the 400% FPL meant losing all APTC eligibility, often resulting in significant repayments. With the removal of this cap, there is no longer a sharp cutoff.
Sliding Scale: Now, eligibility for APTC is determined on a sliding scale, ensuring that no household purchasing a benchmark plan pays more than 8.5% of their MAGI towards premiums, regardless of income level.

I’m uncertain about how this situation will affect me, specifically whether I’ll have to repay all of the Advanced Premium Tax Credit (APTC) or just a portion of it. Understanding this is really important to me because if I end up having to repay the full amount, I’ll make sure to closely monitor my Modified Adjusted Gross Income (MAGI). If I’m nearing the 400% Federal Poverty Level (FPL) limit, I’d stop working to avoid having to repay anything. Honestly, taking a couple of weeks off at the end of the year doesn’t sound too bad!

Thank you so much to everyone who’s read this far and to anyone who can help clear up my doubts and concerns. If you need more details or if anything I’ve said isn’t clear, please feel free to ask.

If your MAGI number is correct ($62,000), then you'd have to pay 8.5% (or possibly less) of the MAGI number, so that would mean you'd be responsible for $5,270 toward your healthcare premium on an annual basis, which comes out to around $439.17 per month.

For more details on what is and isn't included in MAGI for ACA purposes, see this link:
https://www.healthcare.gov/income-and-h ... come/#magi

Regards,

Statistics: Posted by asr63 — Wed Aug 14, 2024 4:18 pm — Replies 3 — Views 107