Opening your premium notice from the health insurance company and discovering that you owe much more than you had been paying to keep your insurance active is shocking. Unfortunately, it happens quite a bit. This information will help you understand why you lost the tax credit, and what you need to do to get it back.
How Can I Lose My Tax Credit?
Quite frankly, there are a lot of reasons that the tax credit would be removed. When you report certain changes to the Marketplace, like being eligible for employer coverage yourself, or through a parent or spouse, or being eligible for Medicaid, Medicare, or VA insurance, you may lose the tax credit. Being eligible for other affordable health insurance plans automatically makes you ineligible for tax credits.
When reconciling your income at the end of the year, the Marketplace receives income information from the IRS and other data sources. If that income is less than the minimum or more than the maximum amount you can make based on your household size to qualify for tax credits, you will lose you tax credit. Also, not filing a tax return for the year that you received tax credits can make you ineligible to receive tax credits in the future.
However, the biggest reason that most people lose tax credits is by not sending in documents the Marketplace asks for. These documents can be to prove a number of things such as citizenship, incarceration status, Medicare/Medicaid status, and most commonly, household income for the year. If the Eligibility Results from your application to the Marketplace requests documents to prove information in your application, you are generally given 90 days to either upload the documents to your healthcare.gov account, or to mail them into the Marketplace. Not doing so by the deadline is a sure-fire way to lose your tax credits, and in some cases, your health insurance coverage.
Can I Get My Tax Credit Back?
If the information on the Marketplace application is correct, then, generally, you can get your tax credit back. If you have lost the tax credit, and are now expected to pay full price for the insurance coverage, then getting the tax credit is usually as simple as going through the application again and resubmitting it.
If your income was a little off, that could have caused the data mismatch that required documents to be sent in the first place, so correcting the information may resolve the inconsistencies for you.
If the income was correct, but data sources show that you made more or less in the last few years, you may still be required to send documents to the Marketplace. However, by resubmitting your application, your 90 day window to get the documents in resets, restoring your tax credit for the next month and giving you more time to send in the documents.
You will be expected to pay the full price for your insurance during the time that the tax credit was removed in order to keep your plan active.
The process is much more complicated if you lost your health coverage. Typically, in order to get back into a plan, you have to send in the documents and give them time to process. The Marketplace will then send you a letter to confirm that you are able to re-enroll into a plan. You can either have your coverage be retroactive from the day you lost it, or start your coverage going forward. Any retroactive premiums will be billed from your insurance company, and usually must be paid within 30 days.
I Uploaded/Mailed My Documents In Time, But Still Lost My Tax Credits/Insurance
Unfortunately, we have been hearing this a lot. Unless you sent in documents Certified Mail, there is no way to prove that you uploaded documents or mailed them to the Marketplace. We recommend calling and checking with the Marketplace to verify they received and processed your documents about 2 weeks after sending them in. And, if you have lost your insurance, sending them certified mail is a good way to guarantee that they were received. If you send in documents, and never hear anything from the Marketplace, chances are they were never processed to your account, and you may need to send them again.
Tips To Reduce Issues:
Be diligent about managing your insurance.
Send documents when requested and check that they were received.
Open all communication from the Marketplace and your insurance company.
Report changes to the Marketplace as they occur.
Most importantly, seek help to get issues corrected. As agents, we have seen every scenario that could occur, and we know how to begin getting issues resolved.