They say only two things in Life are certain: Death and Taxes.
Today we get to talk about how the Healthcare you have to prevent the First certainty affects the Second. Fun Stuff. So, I’ll try to keep this as brief and interesting as it can be.
When you sign up for Healthcare in the Marketplace, you (or your agent), lists your projected household income for the next year. The lower your projected income, the lower the premium you pay each month for Healthcare. I can hear you asking: “So why doesn’t everyone put their projected income as low as possible?”. The reason this does not work is Income Taxes. When you file your taxes, the Government compares your expected income to your realized income. If your projected income was too high, and you overpaid for Health Insurance, you get a tax refund. If you listed your expected income as low as possible, and had a cheap premium, you will owe back the difference through your tax bill.
This is one of the fundamental facts of the Health Insurance Marketplace, one too few people understand. If your Household Income was listed low during enrollment, that has a ripple effect in price, product, and taxes. Because, come Tax Time, you could owe back money.