How are subsidies calculated? | Blue Shield of CA (2024)

FAQs

How are subsidies calculated? | Blue Shield of CA? ›

Income, household size and affordable coverage

In 2024, an individual in a one-person household is eligible for some degree of Covered California subsidies if they earn up to $33,975 Meanwhile, that limit rises to $69,375 for a household size of 4. These numbers refer to your Adjusted Gross Income (AGI) as found on line 11 of your Form 1040.

Repayment of Benefits: You may be required to repay the benefits you received while your income was inaccurately reported. This repayment can be a substantial financial burden, especially if the unreported income period is extensive.

According to Covered California income guidelines and salary restrictions, if an individual makes less than $47,520 per year or if a family of four earns wages less than $97,200 per year, then they qualify for government assistance based on their income.

If you received too much money throughout the year, you may have to pay some back. On the other hand, if you received too little or didn't take your tax credits in advance, you'll get money back.

The subsidy is the vertical distance between the seller's price and the buyer's price, as shown in Figure 2.15. The welfare analysis of the subsidy compares the initial market equilibrium with the post-subsidy equilibrium. ΔCS = + C + D + E, ΔPS = + A + B, ΔG = – A – B – C – D – E – F, ΔSW = – F, and DWL = F.

Under the Affordable Care Act, eligibility for subsidized health insurance is calculated using a household's Modified Adjusted Gross Income (MAGI). You are expected to pay a premium contribution limit (a percentage of your annual income) for healthcare coverage.

So, retirees looking to get subsidies in 2023 and beyond may need to cap their tax-reportable income at or below 400% of the federal poverty level for their household size. The gist of optimizing ACA subsidies is this: retirees don't have to be poor; they just need to have low income on their tax return.

What is the highest income to qualify for Obamacare? ›

The income range is $30,000 to $120,000 in 2024 for a family of four. (Income limits may be higher in Alaska and Hawaii because the federal poverty level is higher in those states.) The American Rescue Plan Act of 2021 also extended subsidy eligibility to some people earning more than 400% of the federal poverty level.

An offer of employer-sponsored coverage generally makes an employee ineligible for a premium tax credit. The exception is if the employer-sponsored coverage is unaffordable or fails to meet the minimum value standard.

According to Covered California's official guidelines, “Your Modified Adjusted Gross Income is your Adjusted Gross Income (found on your tax return) plus any tax-exempt Social Security, tax-exempt interest, and tax-exempt foreign income you have.”

Your Marketplace coverage will not be cancelled automatically by your plan when you turn 65 and sign up for Medicare, but if you receive premium tax credits to help you pay for your Marketplace plan premium, your eligibility for these tax credits will end when your Medicare Part A coverage starts (people with Medicare ...

If you used more premium tax credit than you qualify for, you'll pay the difference with your federal taxes. If you used less, you'll get the difference as a credit. Refer to glossary for more details.

The Marketplace will check if your annual household income matches the most recent data from our data sources. This will happen even if you didn't update your income. You may be asked if: ∎ You stopped working, worked fewer hours, or changed jobs since last year.

Identification: You must have used an Individual Taxpayer Identification Number (ITIN) when filing your taxes. Income Limits: Your total California Adjusted Gross Income (AGI) must not exceed $75,000.

Who is Eligible for Covered California? All U.S. citizens, U.S. nationals and noncitizens lawfully present in California may apply for health care through Covered California. Who is Not Eligible for Covered California? If you are not lawfully present in California, you are not eligible for a Covered California plan.

If income drops during the year

You may qualify for a more subsidy or even qualify for any subsidy if you were right on the income 400% level. It's best to keep this information as current and accurate as possible to protect yourself.