Some families may end up owing Uncle Sam a sizable refund if they accept government help on buying health insurance next year under President Obama’s Affordable Care Act.
A study published Monday in Health Affairs estimates that 38% of families that qualify for federal premium subsidies might have to repay some portion if changes in their household income aren’t reported to the government.
These subsidies are a crucial part of the federal healthcare law intended to help make insurance more affordable for lower- and middle-income people. Individuals earning less than $46,000 a year, and families below $94,000 annually may qualify for these premium tax credits.
But a raise, bonus or other unexpected income during the year could alter a person’s eligibility and subsidy amount, triggering a repayment when the person files income tax forms for 2014. Some policy experts worry that experience could sour people on the healthcare expansion.
“There’s the potential for some sizable repayments,” said Ken Jacobs, the study’s lead author and chairman of the UC Berkeley Center for Labor Research and Education.