The new California Franchise Tax Board (FTB) 3895 is a close mirror image of the federal 1095A. The FTB 3895 statement reports important data regarding your health insurance through Covered California such as the monthly premiums, Second Lowest Cost Silver Plan, and how much Covered California paid to your health insurance company to lower your premiums.
Advance Premium Tax Credit
Posts related to the Advance Premium Tax Credit health insurance subsidy from Covered California.
The Shop and Compare Tool calculated the subsidized rates for each Silver 70 health plan for 2021. When compared to 2020, the monthly health insurance premium for the 55-year-old individual increased between 25 and 160 percent. Kaiser, the least expensive Silver plan, had the largest dollar increase of $175 per month. Without the Oscar expansion, the Blue Shield HMO Silver 70 would have been the SLCSP, but the much less expensive Oscar Silver plan came in second, $139 lower after the subsidy.
The confusion lies in the statement that the consumer is not eligible for the California Premium Subsidy. The California Premium Subsidy program is completely separate from the federal Premium Tax Credit subsidy. You can be eligible for the federal subsidy but not the State subsidy. If your income is over 400 percent of the federal poverty level, you are not eligible for the federal Premium Tax Credit subsidy, but you may be eligible for the State subsidy.
Joe and Jan report the income change to Covered California in June so the new lower subsidy will take affect July 1. Much to their surprise, instead of a $850 subsidy, they only receive a $500 subsidy. Their health insurance premium will double! Why? Because they already used $7,200 of the new lower $10,200 subsidy at the higher income amount.
The extra $3,000 is clearly stated on the 1095-A. I have seen it. The question is, “What did Kaiser do with the extra $3,000 and how did they not figure out that they were receiving no consumer premium to attach to the monthly subsidy?”
When the Byrd’s put all their information into the application, it calculates that they should pay no more than 7.30% of their income toward health insurance ($3,352 per year), and subtracts that from the annual cost of the Second Lowest Cost Silver Plan ($16,368 – $3,352 = $13,014.12) The exchange then divides the annual $13,014 of the subsidy by 12 months to get a monthly subsidy of $1,084.50.
For most tax payers, the income they estimated on their application for health insurance will not be exactly the same amount as their final Modified Adjusted Gross Income (MAGI) on their 2019 federal tax return. Part II of form 8962 compares the subsidy you received (column f) to the amount of subsidy you are entitled to (column e) from data supplied by the market place exchange on form 1095-A.
The family continued to wait, not paying any of the invoices they received because they figured that Covered California was working to resolve the issue. The health insurance plan was terminated by the health plan for lack of payment. If the consumer does not pay the all the premiums after 90 days, the consumer loses the right to make all the back-premium payments and reinstate the health plan. This is what happened to the family.
The 1095-A is almost as important as filing taxes. Even if you did not owe taxes in 2017, but still received the APTC, you have to file a tax return. Covered California has been notified by the IRS if a current household, receiving the subsidy, has not filed a 2017 tax return. Covered California is sending out letters to consumers that their current monthly APTC subsidy will be terminated if they do not resolve the issue.
On the old 1040 tax forms you report any repayment of excess Premium Tax Credit on line 46, and any additional PTC owed to you on line 69. For 2018, repayment of the PTC subsidy is reported on Schedule 2 Tax (line 46) and additional subsidy tax credit is listed on Schedule 5 (line 70) Other Payments and Refundable Credits. It’s important to know where to find these numbers if you are trying to forecast for the next year and are using the past figures as a guide.