Getting the Right Financial Help, in the form of an Advanced Premium Tax Credit test
Advanced Premium Tax Credits (APTC) can lower the cost of health care for individuals and families who enroll in a Covered California health plan and meet certain income requirements. The amount of APTC you receive is based on how much money you make, your tax household size and where you live. To qualify, individuals must not also have an offer of affordable, minimum value health insurance from an employer or a government-sponsored health coverage.
- Employer insurance is considered affordable under the health care law if the employee’s share of the premium for the lowest priced plan available that would cover the employee only — not the employee’s family — is 9.66% (9.69% for 2017) or less of their household income. Employer insurance provides minimum value if it pays for at least 60% of the covered benefits provided to the employee. Applicants offered job-based coverage that is affordable and provides minimum value aren’t eligible for APTC if they purchase a plan through Covered California.
Because APTC is based on information that can change during the year, like income, family size, or where you live, it’s important to keep Covered California updated about these changes so that your APTC can be adjusted if needed.
To learn more about how changes in circumstances can affect your premium tax credit, click to read more about this on the IRS website.
What do I do if I have a change in my income or application information at renewal or during the year?
You can log on to your Covered California online account to safely and securely report your changes. If you don’t already have an online account, we recommend that you create a Covered California online account.
You can also contact your Certified Insurance Agent or Certified Enrollment Counselor, or call Covered California at (800) 300-1506 (TTY:  889-4500) and a Service Center Representative will assist you to make the change in your account.
It is possible that you will qualify for more premium assistance than you received because at the end of the year your income was lower or your tax household size was larger than what you reported to Covered California. If this happens, you may get money back when you file your taxes.
It is also possible that you qualify for less premium assistance than you received because at the end of the year your income was higher or your tax household size was smaller than what you reported to Covered California. If this happens, when you file taxes you will have to repay the extra amount you received.
Every year, Covered California will send enrollees a tax form called a Form 1095-A, which you will need when filing your taxes. Your 1095-A shows the amount the Internal Revenue Service (IRS) paid to your insurance company during the previous year to help you with the cost of your health coverage. The amount paid was based on the income information and household size you provided. If your income changed, you may have paid too much or too little for your health coverage. Read more about this form here.
What can I do to avoid owing money when I file my taxes?
- If you have a change in your application information, you must report the change to Covered California within 30 days. Also, if Covered California asks you to provide documents that verify your income, you must do so by the date listed on your notice.
- If you are worried about owing money at tax time, you can choose to take less of the APTC each month. Your monthly premiums will still be lower, but not as much. By taking less credit during the year, there is less chance you will owe back money at tax time.
- You can also choose to pay the full premium amount each month. If you choose this option, when you file your taxes you would subtract your tax credit from the tax you owe — or get a bigger refund if you didn’t owe anything.