Since my wife and I were dependent upon her modest income in January 2020, we opted to purchase insurance through Covered California until I became employed. At the tail end of February 2020, I found a job that provided health insurance for us both and therefore I immediately notified Covered CA that I wanted to cancel our coverage. Unfortunately, I was told that Covered CA could not cancel our coverage until the end of March 2020, since they required notification by February 15th for cancellation on March 1st. So, my wife and I had health insurance coverage from both my employer and the Covered CA throughout March. However, we only used the employer-based plan during the month of March, since this plan offered more comprehensive coverage.
When filing taxes for 2020, I discovered that our income exceeded 400% of the FPL, so it seems we are now required to repay at least a portion of the health insurance subsidies on our state income tax return. I have two questions:
1. I understand that the American Rescue Plan waived repayment of federal health insurance subsidies, and I can see that I owe nothing on my federal tax return. Does California offer a similar waiver, or are we required to repay a portion of these subsidies.
2. Given that I notified Covered CA upon receipt of my employment offer and yet their deadline requirements precluded the cancellation of our Covered CA policies until the end of March, must we still repay subsidies for health insurance plans we did not even use?
Thank you for your assistance!
