California health insurance - Comparing Covered Ca Plans - What period does Covered Ca look at?

What Income Period Do They Look At For Subsidy?

Income and employment situations can change often for Californians and the last 5 years have only accelerated that change.

We have spoken about how Covered California has brought about sizable subsidies which are primarily based on income.

The obvious and very important question that many visitors immediately ask is this,

"What period of income do they look at?"

Great question. Let's take a look.

The Short answer to period of income qualification

The short answer is this...

the system will look at your best estimate for the current year's gross income.

Officially, the enrollment system is supposed to "ping" or validate the information entered against official tax or income data from the IRS or EDD but the information prompts in the actual online application are quite specific.

This is what you can expect to enter when you check for subsidy eligibility.

Income questions for the California Exchange application

In the income section, the system will ask you to enter current income data.

It will literally ask how much you make hourly, monthly, annually from a given employer. You have the ability to add additional employer's and other household income.

These are the listed possible items in the system:

Payroll
Unemployment Benefits
Social Security Benefits
Retirement/Pension Income
Rental or Royalty Income
Alimony Received
Investment Income
Capital Gains
Farming or Fishing Income
Cancelled Debts
Court Awards
Jury Duty Pay
Miscellaneous

What about inconsistent information (income has changed)

Assuming that the system then compares your entered info against IRS and/or EDD info and the information is significantly different (+/- 10%), the system does have a verification section where additional documentation can be requested and you will be able to submit this info within an allotted time.

If the inconsistencies are income related, the system may offer you a temporary approval status and subsidy allocation pending confirmation. Let's look at some situations where this might be possible.

Loss or reduction in employment or hours

Let's look at a person who made $50K (single household) in 2012 which is reflected on her tax returns filed April 2013.

What if she decided to go back to school and reduce her income to part time, effectively dropping her 2013 expected income to $30K?

That's a huge deal in terms of qualifying for California health subsidy.

The approximate cap for income eligible for a subsidy is about $46K. Based on her 2012 income, she would not qualify for one.

Based on her 2013 income, she may indeed qualify and that could mean $1000 of dollars in subsidies. Of course, the opposite can also occur (increase in income from prior year) and this poses another challenge. What happens if we take too much or too little subsidy to which we are eligible?

Reconciling health subsidies at tax time and during the year

The online system has a built in ability to adjust received subsidies any time during the year and even at the time of enrollment in order to accurately reflect your income and expected subsidy.

You are required to immediately update this information as it changes.

Ultimately, the health subsidy is an Advanced tax credit and if too much is received, you can expect to pay back at least a portion of the subsidy.

You can run your Health Plan Quote here to view rates and plans side by side from the major carriers...Free.

Again, there is absolutely no cost to you for our services. Call 800-320-6269 Today!