27 Aug Insurance Talk — Premium Tax Credits and COVID-19 Payments
Rex and Cheri have the answers. Listen here.
Insurance Talk — Premium Tax Credits and COVID-19 Payments
Cheri Martinen – Welcome to Insurance Talk with Cheri Martinen and Rex Lesueur. We’re the father-daughter team from Bancorp Insurance. Bancorp Insurance is your locally owned and run family insurance agent located in La Pine, Oregon. We’re here to help you with your commercial lines, general liability, property, and auto insurance, as well as your home and your auto insurance for your personal needs.
Today we’re talking about Medicare and health insurance. We’ve done a couple of podcasts on how you can save money in a down economy for your personal lines. We’ve talked about how you could save money for your commercial lines. And today I want to talk about how you can save money for your health insurance or things that you might need to think about for your health insurance coming up right now.
Premium Tax Credits and COVID-19 Payments
There have been premium tax credits that have been given for your individual health insurance. Normally we do the calculation for that at the beginning of the year. So if you purchased health insurance through www.healthcare.gov you might have a subsidy, and the subsidy allows you to not pay as much for your health insurance throughout the year. It could be a savings of as little as $200 or $20, up to $800.
If you know that you’re getting support or help paying for your health insurance, the recent COVID-19 payments could affect that subsidy. The very first one is the $1,200 that was either directly deposited early in the spring into your account from the federal government or mailed, I think all of the payments are out at this time in August. That payment does not affect your subsidy, so you don’t have to worry about that. That does not affect your household income, so you will not be penalized for that particular stimulus check that you received.
Now, what I’m running into, and this is something that people are starting to hear more and more about, is if you’re collecting unemployment and the additional funds that the federal government gave, the $600 a week, if that unemployment money is higher than the amount of your household income that you estimated to make in 2020, you might owe money back to the federal government when you do your taxes in 2021. All of the payments for your health insurance are done based on your household income. So if that $600 in unemployment you’re collecting from the state raises your income higher than the amount that you thought you were going to make, the chances of you having a higher payment to make at the end of this year when you do your taxes is pretty good.
Unfortunately, that means that there are only a couple of things you can do. You can just continue collecting unemployment and know that you will probably have to pay a higher tax rate on this because of your health insurance subsidy at the end of the year when you file your taxes in 2021. Or you can go and change your household income at www.healthcare.gov. You can do it by logging into www.healthcare.gov directly and updating your household income, or you can call your agent and we can work with you to make sure that you have your household income updated.
This is important because nobody likes a surprise at the end of the year when we’re doing our taxes. On the tax return, we’d like to actually have a return. So just keep that in mind. Think about your household income as you’re getting unemployment checks, maybe check your documentation or your account at www.healthcare.gov and just make sure you’re on the right track to make what you estimated to make.
The good news is if for some reason you’ve been laid off or you are collecting unemployment and it’s less than what you estimated, you have the opportunity to be paid additional money or get a higher refund at the end of the year. I’m hoping that more people are in this category. And if for some reason, they were laid off and they’re collecting unemployment that they can receive additional funds.
If you’re in this situation or you’re nervous about your health insurance and your subsidies that you’ve been receiving to help pay for your health insurance costs, give us a call. Don’t feel like you can only talk to us during open enrollment. We’re at Bancorp Insurance, 1-800-452-6826. We can update your income now, and it could help with that possible big bill at the end of the year, depending on how good the unemployment was for you. Thank you for listening to Insurance Talk, Rex has been here very quiet the whole time.
Rex Lesueur – It’s the first time I haven’t had anything to say. You got it all.
Bancorp Can Answer Your Questions About Health Insurance Subsidies
CM – This one I want everyone to know. If you’ve got a health insurance subsidy and you were making more on unemployment than you were at your job, you have to be ready at the end of the year. It’s either going to be a bill, or we can update it now and make that bill go down. Call us, or you can visit us online at www.bancorpinsurance.com. You can listen to our podcast on our website or on any podcast streaming station. Thank you for listening.