Income Changes and Marketplace Plans: What You Need to Know
- September 14, 2023
- Ask Betty!
Hey there! Are you experiencing income changes & wonder how that might affect your pricing on Marketplace plans?
Welcome to this week’s episode of “Ask Betty!” where Ninja Betty is here to answer all your burning health insurance questions. This question comes from Haley_Boop92, and it’s a great one! By the way, we’ve sent you a $25 Amazon Gift Card as a thank you for submitting such an awesome question!
Q from YOU to Ninja HQ
“I’m actually having an amazing year and my income is going to be way higher than I originally expected! How will this affect my Marketplace plan’s pricing?”
Income Changes Potential Impact on Insurance Rates
it’s fantastic that you’re having a great year and expecting a higher income than you originally thought. However, it’s important to consider how this may affect your Marketplace plan. Unfortunately, a higher income can potentially have a negative impact on your tax situation. Depending on the extent of the increase, you may need to pay back some or all of the Tax Credits you received.
Caps OnTax Credit Repayments from Income Changes
But don’t worry! There is a cap on how much the IRS can require you to repay. For 2022, the maximum amount is set at $2800, and for 2023 it’s $3K. It’s always beneficial to keep these considerations in mind as you navigate through any changes in your income.
Tax Credits (Used to Discount Health Insurance) & Income Changes
The monthly premium subsidy amounts, also known as the advance premium tax credit (APTC), are determined based on your estimated income for the upcoming year. However, the actual amount of your premium tax credit depends on your real income during the year that you receive subsidized health insurance coverage.
In some cases, if individuals end up earning more than they anticipated, they may be required to repay a portion of the subsidy. This can come as a surprise to many people since the tax credits are directly paid to their insurance carriers each month. If an individual receives an overpayment, they will need to repay it themselves. However, it’s important to remain optimistic about receiving this subsidy and getting financial assistance for your health insurance premiums.
Limit Your Losses & Set Up Next Year for Success
For now, let’s not dwell on the negatives! Since you’re looking ahead to next year, we can explore alternative options to the Marketplace that might better suit your needs. Feel free to send us a private message with any further health insurance questions you may have. And remember, if we feature your question in an upcoming episode of “Ask Betty!”, you’ll receive a generous $25 Amazon Gift Card as our token of gratitude.
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