Health insurance

What to know about health insurance at tax time

The taxman is coming.

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

A big surprise might be revealed if you earn more income than expected. If so, you may be required to repay some or all of the state and/or federal grant.

Covered California will send the IRS Form 1095A Health Insurance Marketplace Statement to all registered members. It is used to complete IRS Form 8962 Premium Tax Credit which forms part of your return.

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

  1. You were enrolled in minimum coverage or a catastrophic plan
  2. You were enrolled in MediCal
  3. You were enrolled in employer-sponsored health coverage through Covered California for Small Business.

If you haven’t received your notice, you can log on to CoveredCA.com and check your account’s secure mailbox to see if the forms are available for download. Otherwise, call 1-800-300-1506 for assistance.

There is a limit to the repayment of the federal subsidy if your income is below 400% of the federal poverty level. The maximum refund for an individual is $1,350 and $2,700 for all other filers. However, if your income is more than 400% of the FPL, you will have to return 100% of the money you received as a grant. You can go over $1 and trigger this refund, so be very careful with this process.

If you’re 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.

State limits are also graduated, but the full amount must be repaid over 700% of the FPL. The maximum reimbursement for someone under 700% of the FPL is $4,200 and $8,400 for all other filers.

If you find an error on the tax form sent to you by Covered California, you can complete the “Request to Correct or Dispute Tax Forms.” A response must be given to you within 60 days, which could create a late tax return for you if you do not request it promptly.

Finally, remember that the state has a mandate for individual health coverage. If you did not have health insurance in 2021 and do not qualify for an exemption, you will 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 age 18 living in the household.

Get reimbursed for the 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 coronavirus public health emergency ends.

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

Marguerite Beck

Anthem members will be reimbursed for over-the-counter COVID-19 diagnostic tests purchased on or after January 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, navigate to ‘Complaints & Payment’ and choose ‘Submit a Complaint’.

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

  • Retailer where the kit was purchased, including physical address or website
  • Date of purchase
  • UPC code of the home test kit, located on the box or receipt
  • Cost of the test

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

Send the claim form with receipt to:

California Blue Shield

PO Box 272540

Chico California 95927-2540

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