Avoiding Trouble When Your Income Falls Below ACA Poverty Level
The Affordable Care Act (ACA) provides health insurance subsidies to low- and moderate-income individuals and families. However, it’s important to be aware that if your income falls below the ACA poverty level after you apply for coverage, you may have to repay some or all of the subsidies you received.
What is the ACA Poverty Level?
The ACA poverty level is based on the federal poverty level, which is a measure of the income required to meet basic needs. For 2023, the ACA poverty level is 138% of the federal poverty level. This means that a single person with an income of $19,320 or less is considered to be at or below the ACA poverty level.
What Happens If My Income Falls Below the ACA Poverty Level?
If your income falls below the ACA poverty level after you apply for coverage, you will need to repay some or all of the subsidies you received. The amount you will have to repay is based on your income and the amount of subsidies you received.
Example: If you received $1,000 in subsidies and your income falls below the ACA poverty level, you may have to repay up to $1,000.
How to Avoid Problems
There are a few things you can do to avoid having to repay ACA subsidies:
Make sure you accurately estimate your income when you apply for coverage. This will help you avoid receiving more subsidies than you are eligible for.
Report any changes in your income to the Marketplace. If your income falls below the ACA poverty level, you will need to report this change to the Marketplace so that your subsidies can be adjusted.
File your taxes on time. If you do not file your taxes on time, the IRS may assume that you deliberately lied about your income and disqualify you from receiving subsidies.
What If I Have to Repay ACA Subsidies?
If you have to repay ACA subsidies, you will have several options for doing so. You can make a lump sum payment, or you can request a payment plan from the IRS.
Get Help
If you have any questions about ACA subsidies or if you need help repaying subsidies, you can contact a licensed health insurance agent.
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