What To Know About Health Insurance At Tax Time

Tax time is always a bit stressful, and if you've subsidized health insurance through Covered California you have some additional issues for which to prepare.

One big surprise could be revealed if you made more income than you projected. If this is the case, there's a possibility you will have to repay some or all of the subsidy from the state and/or the federal governments.

Covered California will send the IRS form 1095A Health Insurance Marketplace Statement to all enrolled members. It's used to complete the IRS form 8962 Premium Tax Credit that is part of your return.

There are three reasons why you would not receive this form:

You were enrolled in a minimum coverage or catastrophic plan

You were enrolled in MediCal

You were enrolled in employer sponsored health coverage through Covered California for Small Business.

If you have not received your notice, you can log in to CoveredCA.com and check your account's secured mailbox to see if the forms are available to download. If not, call 1-800-300-1506 for help.

There's a limit on repayment for the federal subsidy if your income is below 400% of the federal poverty level. The maximum repayment for an individual is $1,350 and $2,700 for all other filers. However, if your income is above 400% of the FPL you'll be required to return 100% of the money you received as a subsidy. You can be over by $1 and trigger this repayment, so be very attentive to this process.

FPL information for 2021 can be found at bit.ly/32zSne6.

Guidelines for 2022 are at bit.ly/3rMRF5D.

If you are at all close to the limits, talk to your tax professional about contributing to an Individual Retirement Account or Health Savings Account to reduce your taxable income.

The state limits are graduated as well, but the full amount needs to be repaid at over 700% of FPL. The maximum repayment for an individual under 700% of FPL is $4,200 and $8,400 for all other filers.

If you find a mistake on the tax form sent to you by Covered California, you may complete the "Request to Correct or Dispute Tax Forms." A response must be made to you within 60 days, which could create a late tax filing for you if you don't request it soon.

Finally, remember that the state has an individual health coverage mandate. If you didn't have health insurance in 2021 and don't qualify for an exemption you'll pay a penalty to the state. Exemptions may be available based on an affordability test or if income is below the state filing threshold. The 2021 penalty is at least $800 per adult and $400 per dependent child under 18 living in the household.

Get reimbursed for COVID-19 test kit

A new mandate is in effect that requires health plans to cover up to eight over-the-counter COVID-19 tests each month – now until the end of the coronavirus public health emergency.

Find out in advance how your carrier will handle the new benefit. Anthem and Blue Shield of California are the primary insurers in our area – and they handle payment a bit differently.

Anthem members will be reimbursed for over-the-counter COVID-19 diagnostic tests purchased on or after Jan. 15, 2022. Members may have to pay out of pocket at the time of purchase, but should keep the receipt to submit a claim online. Log in to bit.ly/3AFbq3i, go to "Claims & Payment" and choose "Submit a Claim."

Blue Shield of California members can submit a claim for a home test kit. A separate form is required for each receipt, and the latter must include the following information:

Retailer where the kit was purchased including the physical address or website

Date of purchase

UPC code for the home test kit, located on the box or receipt

Cost of the test

Be sure to highlight these items if there's more than one item on the receipt and write HOME COVID TEST next to it. Always be sure to keep copies for yourself.

Mail the claim form with the receipt to:

Blue Shield of California

PO Box 272540

Chico California 95927-2540

Margaret Beck has been a licensed insurance broker since 1978. Call her at 530-225-8583.

Insurance Insights

Margaret Beck

Guest columnist