Kevin Knauss: Health, History, Travel, Insurance
Posts related to the California Premium Subsidy, which is a health insurance subsidy targeted on income of 400% - 600%.
Lines 24 through 26 of Part II of form 8962 determine if the household is eligible for an additional Premium Tax Credit. In this situation, the final household MAGI was slightly lower than estimated income amount of the Covered California application. The result is that the household is eligible for an additional $23 in Premium Tax Credit. They were eligible for an annual subsidy of $16,832, but only received $16,809.
The subsidy benefit for families burdened with crippling employer group health insurance premiums can be enormous. Unfortunately, acquiring the necessary employer information and calculating the affordability percentage can be daunting for some families. However, Covered California has created some worksheets and tools to help in the process.
In this particular case, the user ID of System-CW-San Diego alerted us that a case worker at San Diego County Medi-Cal had reviewed the application. I cannot say that the case worker changed the tax filing status. There are instances when the Medi-Cal system does not properly mesh with the Covered California CalHEERS software. There are times when conditional information is just erased or changed because of an incompatibility with the data fields.
Where households realize a dramatic increase in Blue Shield PPO Covered California premiums is when the SLCSP has a small increase or negative rate change. Consumers in regions 2, 3, 4, 6, 7, 15, 16 and 18, where the SLCSP rate increases were in the low single digits will see a smaller subsidy. In other words, the Blue Shield PPO plan rate increases in those areas was greater than the SLCSP that the subsidy is based upon. The subsidy did not keep pace with the Blue Shield PPO rate increase like they did in regions 1 and 10.
Of course, if the annual premium for the second lowest cost Silver plan increases more than the other plans, it increases the subsidy for all consumers. In this example, the consumer would see monthly premiums for most plans below the 2022 levels. However, the second lowest cost Silver plan would have no increase from 2022 to 2023, even with the larger annual unsubsidized premium increase.
You are first offered the chance to adjust the APTC subsidy from 100 percent to a lower percentage when you first enroll in a Covered California health plan. After the enrollment has been completed you must fish around in your account to find the APTC slider. The APTC slider allows you to reduce or dial back how much of the monthly APTC subsidy you are receiving from 100 percent down to 0.
Fortunately, for most California taxpayers, the amount of the California premium assistance subsidy (CPAS) they received was relatively small. For some Covered California households who received large monthly amounts of the CPAS, the repayment could significantly add to their California income tax liability for 2021.
Tom received unemployment insurance in 2021. Because of the unemployment insurance, Tom’s household income is 133 percent of the federal poverty level, regardless of his income. That 133 percent of the federal poverty level translates into $0 annual contribution for the second lowest cost Silver plan. Since the second lowest cost Silver plan premiums equaled $15,000 for the year that amount becomes the maximum subsidy allowed. Tom is eligible for an additional $2,318.40 ($15,000 – $12,681.40) in Premium Tax Credit because of the unemployment insurance benefit.
When you remove a family member from the health plan only, not the tax household, and everything else stays the same, the subsidy will decrease. The income is the same. The household size is the same. The full rate of the health insurance has been reduced. As the health insurance cost is reduced, the subsidy is reduced as less subsidy is needed to keep the household’s health insurance premium at the consumer responsibility level.
It is counterintuitive, but for 2022, increased competition in the health insurance market for Contra Costa County will increase the premiums for Covered California members in the region. How is this possible? The subsidies are based on the Second Lowest Cost Silver Plan. Bright HealthCare, a new health plan, will offer Silver plans in 2022 […]
