What do you Have to Pay Back If you Make too Much for your Cost Assistance?
I work as a nurse for a private insurance company, but I was asked a question about Obamacare that I could not answer. If someone started out with Obamacare in 2014 because they qualified and then, later in the year, no longer qualified and dropped Obamacare due to a job change, will she be required to pay back claims she had from hospitalization in 2014? This lady has absolutely no idea how to manage her healthcare and dropped here ObamaCare coverage this month.
Answer
She will not have to pay back claims, but she may owe back some or all of her advanced premium tax credits for the year.
It sounds as though the amount of Premium Tax Credits that she got in advanced (based on here estimated income at the beginning of the year) may have been more than she actually qualified for based on the actual amount of income she's reporting on her tax return this year.
If this is the case, your patient probably took those tax credits up front and, because of this cost assistance, had a reduced premium for part of the year. However, if she made more income than she thought she would (due to a change in job), she may have have to pay back some or all of the tax credits which, based on her actual annual Modified Adjusted Gross Income, she received but did not earn. She will have to do this on this years tax return.
That being said, she will not have to pay back her insurance claims. Her marketplace policy is separate from the cost assistance she received.