Marketplace healthcare tax refund

[tgordon289]

If I overestimated the amount I thought I would earn for 2022 and as a result ended up paying $100 each month for a marketplace plan instead of qualifying for Medicaid (which I would have qualified for based on actual amount earned), would  I not get refunded that amount paid each month? Or is that not how it works.

[BillM223]

The way it works is this:

Each taxpayer has an annual contribution towards their health insurance. This contribution is calculated on form 8962 (see line 8a).

The Marketplace uses this amount to calculate how much subsidy it needs to provide towards your insurance premium. As you may know, the insurance in the Affordable Care Act is "affordable" because the government pays part of the premium, with you paying the rest, depending on your calculated annual contribution. Note that the money from the Marketplace is sent straight to the insurance company.

Of course, line 8a is based on your estimate of your annual income. At the end of the year, there is a reconciliation that compares your estimated income for the year with your actual income for the year. This changes what your annual contribution should have been.

If your annual contribution should have been higher, then the Marketplace overpaid the health insurance company, and you need to pay the government back for some of that. If you end up making less money that what you estimated at the beginning of the year, then you get a refund of some or all that you paid.

So you need to decide at the beginning of the year if you are going to apply for Medicaid or not. If you stick with the Marketplace plan and overestimate your income at the beginning of the year, at least you should get back some or all of what you paid for the health insurance premiums.

[tgordon289]

Thank you! this is very helpful.

If it appears I'm not receiving any sort of refund based on what TurboTax calculated, should I wait to file and contact an agent or professional to review. Or is that officially sorted out after I file my taxes?

Thanks

[RobertB4444]

If you entered everything from your 1095-A exactly as it is on the form and TurboTax isn't giving you a PTC credit then the system has calculated that you aren't entitle to it.  

Even when you overestimated your income this can happen depending on the amount.  

The good news is that if you should have gotten an amount back and there is an error on the return that is preventing you from receiving it then the IRS will probably catch it.  They're actually pretty good about that.  It may delay your refund for a bit but they'll probably get it right.  

Contacting TurboTax to have someone review your taxes is always an option but it can be an expensive one.  Make sure you check the price before you make that decision - especially if a review is not going to result in increasing your refund.

@tgordon289 

[tgordon289]

Hi,

Thank you so much for these responses! They are very informative and certainly helped me in this process.