Question

The Affordable Care Act (LO 7.4)

Susan and Stan Collins live in Iowa, are married and have two children ages 6 and 10. In 2018, Susan's income is $38,290 and Stan's is $12,000 and both are self-employed. They also have $500 in interest income from tax exempt bonds. The Collins enrolled in health insurance for all of 2018 through their state exchange but did not elect to have the credit paid in advance. The 2018 Form 1095-A that the Collins received from the exchange lists the following information:

Annual premiums $9,800 Annual premium for the designated silver plan in the state $10,800 Assume that the Collins Form 1095-A also indicated that the total advance payment of the premium tax credit was $9,200. The Federal Poverty Line for a family of four is $24,600 Table for Repayment of the Credit Amount Taxpayers Other Than Single $600 1,550 2,600 No limit Single Less than 200% At least 200% but less than 300% At least 300% but less than 400% At least 400% $300 775 1,300 No limit Click here to access the 2018 Applicable Figure Table to use for this problem Calculate the excess advance premium tax credit and the repayment amount for 2018 Round any division to two decimal places before converting to a percent. Excess advance premium tax credit Repayment amount

Answer 1

Susan's income $38,290 Stan's income = S12,000 Children's income $0 Interest income from tax exempt bonds = $500 Therefore Total modified adjusted gross income of the family = $38,290 + $12,000 $500 $50,790 Federal Poverty Line for a family of four $24,600. Therefore, Total modified adjusted gross income as of four $50,790 $24,600 206% percentage of Federal Poverty Line for a family Since the total modified adjusted gross income as family of four is 206, eligible credit will be 6.55% (see 2018 instructions for Form 8962) of the total modified adjusted gross income percentage of Federal Poverty Line for a Therefore, Eligible credit $50,790 x 6.55% $3,327 Now Annual premium for the designated silver plan in the state $10,800 = Therefore, Excess advance premium tax credit = $10,800 - $3.327 = $7.473 Also Now Advance payment of premium tax credit $9,200 Therefore Excess advance payment of premium tax credit = $9,200 - $7,473 $1,727 However, the maximum cap for repayment is $1,550 Thus Repayment amount = $1.550