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Your income will be checked with the IRS records or a Federal Database, so if you claim a certain income, the “Exchange” will check with the IRS of your past years’ income tax records – before you get approved for a subsidy.
Individuals and families will state their income based on their MAGI – (Modified Adjusted Gross Income.) The State will then verify that information through the IRS against your previous tax returns. If the stated income on the application is more than 10% lower than what the IRS shows, the State will require the individual to prove their income within 90 days, but you’ll still get enrolled. Your financial information is run through a Data Services Hub – A tool the government is using to verify applicant information and income for the “Advanced Premium Tax Credits.” (To see if you qualify for a subsidy.)
BE VERY CAREFUL NOT TO GET TOO MUCH SUBSIDY. The reason being would be you’d have to pay the extra subsidy back to the IRS. For example, if your health insurance premiums are $1,000/month and you get a Government Subsidy of $800/month and you only have to pay $200/month. At the end of the year when you have to settle up your taxes on April 15th of each year, the Government will check your income, and IF you were only supposed to have received an Advanced Premium Tax Credit (subsidy) of $700/month instead of $800/month, you’ll owe the Government an extra $100/month X 12 months is $1,200. How do you avoid this? (It is VERY important to read the “Redetermination for income changes” AND the “Reconciliation of Premium Credits” definitions both).
Please note: If you are providing insurance to your employees, and if you offer health insurance benefits only to your employee, in Nevada the employee’s spouse and children are able to get a subsidized plan, but the subsidy is based off of the “household” income. HOWEVER, if you DO OFFER coverage to the spouse and dependents and they elect not to take the coverage for whatever reason, (the spouse may feel your employer plan is too expensive), then that spouse is NOT able to go and get a subsidized plan!! Please keep this in mind. You may repel employees if you are not careful.