Affordable Care Act: Ending subsidies when new job starts

If someone doesn’t have insurance through his current employer and qualifies for a subsidy to purchase through the marketplace coverage but then gets a new job that offers insurance, do the subsidies stop? If so, how? Is the employee responsible for telling someone? And, if the employee doesn’t tell anyone and isn’t supposed to get subsidy anymore, what does the government do? Will there be some settling of the account at tax filing?

New Job Seeker

Dear New Job Seeker,

When you get the new job and enroll in their health plan, you would drop your previous plan (purchased through the exchange). This will effectively end your subsidies.

Once you have an employer plan, you do not qualify for subsidies on the exchange, assuming that the employer plan meets health reform’s minimum standards. You would have to repay these subsidies when you file your taxes. You are exactly right — it’s a settling of accounts at tax time.

You are responsible to notify the exchange of your change in status. You would, similarly, notify them of any changes in income so that your subsidies could be adjusted. By keeping these up to date, you can avoid having to repay the government money at tax time.

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Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.