Updated: Aug 29, 2021
Many individuals are receiving their health insurance from a plan on the Health Insurance Marketplace that includes a subsidy that reduces their medical premium. If you are one of those individuals, you may have to pay back a portion of the subsidy received at tax time if your total family income ends up being higher than estimated.
The Marketplace suggests making sure your income is updated throughout the year when changes occur, so you do not have any surprises at tax time. If your subsidy ends up being more than you are entitled to, that “extra” amount received for the year will be added to your federal tax bill.
Since there are so many plans to choose from, it’s important to enlist a competent broker to assist in the process. This shouldn’t be any extra cost to the consumer since most brokers are compensated directly from the insurance carriers.