tax credits

How to avoid a tax surprise from marketplace health coverage

Kateryna Onyshchuk | iStock | Getty Images

If your income is trending much higher this year than you anticipated, it’s likely a welcome shift.

However, for anyone who gets their private health insurance through the public marketplace, that extra cash could mean an unexpected tax bill when they prepare their 2022 return next spring. A midyear income check could help avoid that.

Basically, if you receive premium subsidies (technically, advance tax credits) through the marketplace, having annual income that’s higher than what you estimated when you enrolled could mean you’re not entitled to as much aid as you’re receiving. And any overage would need to be paid back at tax time.

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Report changes that may affect insurance subsidies

“You really should go

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Health insurance premiums through marketplace poised to jump in 2023

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If you get your health insurance through the government Health Insurance Marketplace, you may want to brace for higher premiums next year.

Unless Congress takes action, enhanced premium subsidies — technically, tax credits — that have been in place for 2021 and 2022 will disappear after this year. The change would affect 13 million of the 14.5 million people who get their health insurance through the federal exchange or their state’s marketplace.

“The default is that the expanded subsidies will expire at the end of this year,” said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its Affordable Care Act program. “On average, premiums would go up more than 50%, but for some it will be more.”

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Possible Expiration of Pandemic-Era Measures Among Drivers of 2023 Health Insurance Premium Changes

WASHINGTON, June 22, 2022 /PRNewswire/ — The American Academy of Actuaries has released a public policy issue brief that points to the possible expiration of two signature pandemic-era measures that boosted health insurance affordability and coverage as among the drivers of potential premium changes for individual and small group plans in 2023.

American Academy of Actuaries. (PRNewsFoto/American Academy of Actuaries)

“Proposed health insurance premium rates reflect many factors, which can include the effects of legislative and regulatory changes,” said Academy Senior Health Fellow Cori Uccello. “This is especially true for 2023 rates, due to the possible expiration later this year of enhanced Affordable Care Act (ACA) premium subsidies and of a key support of Medicaid coverage during the pandemic.”

The issue brief, developed by the Academy’s Individual and Small Group Markets Committee, Drivers of 2023 Health Insurance Premium Changes, discusses these key factors and others that may account

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Millions could lose health coverage if premium subsidies expire later this year, officials say

Absent Congressional action, many consumers will see health-coverage costs skyrocket next year, Biden administration officials warned Wednesday. 

The American Rescue Plan, signed into law in March 2021, temporarily expanded premium tax credits available to consumers signing up for health coverage through the Affordable Care Act marketplaces. Those expanded tax credits are set to expire at the end of this year, and extending them would require Congressional legislation. 

“Time is of the essence,” Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, said on a call with reporters Wednesday. As this fall’s open enrollment for 2023 marketplace coverage draws near, “we want to make sure that people know the subsidies will be in place,” she said. 

A record 14.5 million people signed up for coverage through the marketplaces during the open enrollment period that ended in January. The average monthly 2022 premium for HealthCare.gov enrollees was $111. Without the

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