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Repayments and Refunds: Estimating the Effects of 2014 Premium Tax Credit Reconciliation

2012 Annual Income Scenario

This scenario addresses people who applied early in open enrollment and by default used their 2012 income tax return to verify their incomes at the time of application.

 Estimates of Premium Tax Credit Repayments and Refunds for 2014 Benefit Year
Among tax households who defaulted to using 2012 annual income at time of application for 2014 tax credit Annual 2012 Income (As a % of 2013 FPL)
100% to <200% 200% to <300% 300% to 400% All (100 – 400%)
Estimated percent of 2014 subsidy-eligible tax households experiencing a change in income by end of 2014
Decrease of 20% or more 25% 36% 30% 29%
Decrease of less than 20% 16% 18% 22% 17%
Increase of 20% or more 35% 24% 29% 31%
Increase of less than 20% 19% 20% 17% 19%
No Change 5% 2% 2% 4%
Estimated percent of 2014 subsidy-eligible tax households with a repayment or refund of premium tax credit
Required to repay some or all of tax credit 54% 44% 46% 50%
Receive a refund for remaining tax credit 41% 55% 52% 47%
No adjustment 5% 2% 2% 4%
Estimated amount of repayment or refund, among tax households projected to owe repayment or receive a refund
Average repayment $899 $1,105 $1,681 $1,048
Average refund $483 $1,322 $1,535 $963
Estimated repayment or refund as a share of tax credit advance payments, among tax households projected to owe repayment or receive refund
Repayment: Average percentage of advance payment repaid -25% -41% -81% -34%
Refund: Average percentage received in excess of advance payment +15% +54% +83% +35%
Notes: Households with a change in the tax filing unit size (e.g. due to birth, death, divorce) are not included in this analysis. Repayment amounts are estimated per tax household, and therefore represent the amount per tax-filing unit (household); not per person or per enrollee.
Source: Kaiser Family Foundation analysis of 2008 Survey of Income and Program Participation (SIPP) panel data.

 

2013 Annual Income Scenario

This scenario captures people who applied early in open enrollment and used their 2013 income, verified through pay stubs or other documentation.

 Estimates of Premium Tax Credit Repayments and Refunds for 2014 Benefit Year
Among tax households who used their 2013 income for 2014 tax credit Annual 2013 Income (As a % of 2013 FPL)
100% to <200% 200% to <300% 300% to 400% All (100 – 400%)
Estimated percent of 2014 subsidy-eligible tax households experiencing a change in income by end of 2014
Decrease of 20% or more 22% 25% 25% 23%
Decrease of less than 20% 18% 24% 26% 21%
Increase of 20% or more 29% 21% 21% 26%
Increase of less than 20% 25% 25% 24% 25%
No Change 6% 4% 3% 5%
Estimated percent of 2014 subsidy-eligible tax households with a repayment or refund of premium tax credit
Required to repay some or all of tax credit 54% 46% 44% 50%
Receive a refund for remaining tax credit 40% 50% 53% 45%
No adjustment 6% 4% 3% 5%
Estimated amount of repayment or refund, among tax households projected to owe repayment or receive a refund
Average repayment $667 $886 $1,380 $794
Average refund $412 $1,016 $1,601 $773
Estimated repayment or refund as a share of tax credit advance payments, among tax households projected to owe repayment or receive refund
Repayment: Average percentage of advance payment repaid -20% -36% -65% -27%
Refund: Average percentage received in excess of advance payment +13% +45% +87% +29%
Notes: Households with a change in the tax filing unit size (e.g. due to birth, death, divorce) are not included in this analysis. Repayment amounts are estimated per tax household, and therefore represent the amount per tax-filing unit (household); not per person or per enrollee.
Source: Kaiser Family Foundation analysis of 2008 Survey of Income and Program Participation (SIPP) panel data.

March, 2014 Income Scenario

This scenario captures people who signed up toward the end of open enrollment and used their current (March, 2014) income in their application.

 Estimates of Premium Tax Credit Repayments and Refunds for 2014 Benefit Year
Among tax households who used March, 2014 income at time of application for 2014 tax credit Annualized March 2014 Income (As a % of 2013 FPL)
100% to <200% 200% to <300% 300% to 400%
All (100 – 400%)
Estimated percent of 2014 subsidy-eligible tax households experiencing a change in income by end of 2014
Decrease of 20% or more 16% 20% 23% 18%
Decrease of less than 20% 29% 29% 30% 29%
Increase of 20% or more 14% 15% 8% 14%
Increase of less than 20% 26% 23% 27% 25%
No Change 15% 13% 12% 14%
Estimated percent of 2014 subsidy-eligible tax households with a repayment or refund of premium tax credit
Required to repay some or all of tax credit 40% 38% 35% 39%
Receive a refund for remaining tax credit 45% 50% 53% 47%
No adjustment 15% 12% 12% 14%
Estimated amount of repayment or refund, among tax households projected to owe repayment or receive a refund
Average repayment $487 $692 $792 $585
Average refund $306 $835 $1,179 $598
Estimated repayment or refund as a share of tax credit advance payments, among tax households projected to owe repayment or receive refund
Repayment: Average percentage of advance payment repaid -15% -28% -35% -20%
Refund: Average percentage received in excess of advance payment +10% +31% +58% +21%
Notes: Households with a change in the tax filing unit size (e.g. due to birth, death, divorce) are not included in this analysis. Repayment amounts are estimated per tax household, and therefore represent the amount per tax-filing unit (household); not per person or per enrollee.
Source: Kaiser Family Foundation analysis of 2008 Survey of Income and Program Participation (SIPP) panel data.

 

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