Yes, you are subject to a "clawback" of subsidies, but I think the maximum is $2500 per family, but I may be wrong. Also, you will be able to manually update your subsidy amount throughout the year, and at time of application you can ask for a lesser subsidy to avoid the situation.
Who is ObamaCare For? The Middle Class....
- Thread starter taterpeeler
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Yes, you are subject to a "clawback" of subsidies, but I think the maximum is $2500 per family, but I may be wrong. Also, you will be able to manually update your subsidy amount throughout the year, and at time of application you can ask for a lesser subsidy to avoid the situation.
I believe those clawback rules were amended as a part of the repeal of the 1099 provisions. The amended maximum amounts of the clawback are $600 for those with incomes of less than 200% of FPL, $1500 for those with incomes of 200%-300% of FPL, $2500 at 300 to 400% of FPL, and none above 400% of FPL. So, if you're rich you may not wish to overestimate your subsidy, because the IRS will clawback the entire subsidy. I'll bet a lot of people overestimate though - kind of like a zero interest loan!
Also, regarding the bankruptcy comment - bankruptcy does not get you out of most IRS and state tax debts.
Also, regarding the bankruptcy comment - bankruptcy does not get you out of most IRS and state tax debts.
It may not get me out of those debts, but the all the other debts I can't pay it certainly will.
Just so I am clear, if I estimate my income to be 250% and after I file for that year it ends up being 320%, regardless of the difference the subsidy should have been, the IRS can only collect $2500 of the difference?
If this is the case, underestimating could be beneficial if you are certain you will fall under the 400% and obviously detrimental if you know you will be over.
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- #24
I do think if you show a pattern of under estiminating your income the boys at the IRS will come calling.... do it once and ok.... do it twice and they start watching do it 3 times and you may wish you lived in Iraq... they aint gonna take kindle to you getting subsidies year after year when you don't deserve it
- 1,896
Or even worse, they may add it to you as taxable income for the following year.
Actually, this may end up being a huge problem for the IRS. When the new home credit subsidy came out, there was an incredible amount of fraud. People in prison were getting checks. The IRS then delayed the subsidy to many homeowners while they checked to see if it was fraudulent. I don't remember the dollar amount, but it was enormous.
Now, imagine this. You have an income of 380% of FPL, but you declare on the app that it is going to be 220% of FPL for 2014. You get rich premium subsidies, plus you get cost-sharing subsidies to lower your deductible, copays and co-insurance. Then you have a clawback of $2500, although your actual premium subsidy is $19,000 (for a family of 4 based on IRS predicted premiums and subsidy calculations).
Since the money goes direct to the insurance company, the only way the family would gain would be the fact that they lowered their budget by paying less net premium than they do for their current coverage. Or, they could gain if they filed medical bills and had reduced deductibles, copays, etc. With benefits like Pediatric Dental, full maternity, etc., I can see that happening.
What a bait for fraud this is!
Now, imagine this. You have an income of 380% of FPL, but you declare on the app that it is going to be 220% of FPL for 2014. You get rich premium subsidies, plus you get cost-sharing subsidies to lower your deductible, copays and co-insurance. Then you have a clawback of $2500, although your actual premium subsidy is $19,000 (for a family of 4 based on IRS predicted premiums and subsidy calculations).
Since the money goes direct to the insurance company, the only way the family would gain would be the fact that they lowered their budget by paying less net premium than they do for their current coverage. Or, they could gain if they filed medical bills and had reduced deductibles, copays, etc. With benefits like Pediatric Dental, full maternity, etc., I can see that happening.
What a bait for fraud this is!
- Thread starter
- #28
Can I get back to ya on that one ?
Oh, PALEEEZE! There are a lot of provisions that won't be a complete disaster. For instance, look at the success of these great provisions:
The PCIP - oh, no, that failed in enrollment, then ran out of $
The 1099 reporting - oops, repealed
CLASS Act Long-Term Care - also repealed
Multi-choice on the SHOP exchange - uh, no, delayed
The BASIC plan - delayed until 2015 or 2016
State-run exchanges - well, not for 26 states, anyway!
Expanding Medicare by force - Supreme Court said no
Mini-Meds are toast - except most of them received waivers
Discrimination Testing - was delayed for the first 2 years
W2 reporting - was delayed for the first 2 years
Co-Op plans - defunded
Business Tax Credits - a small % actually received $ from it
Families get subsidies - oops, unless one is employed with an "affordable" plan for self-only
