People who underestimate their income and receive health insurance marketplace subsidies that are too large have to pay some or all of the extra money back during tax time. This is known as subsidy reconciliation. However, the reconciliation process includes limits that protect those with lower incomes. If you’ve resisted signing up for marketplace health insurance subsidies because you were worried about owing a lot of money if your income increased, talk to Champion Insurance Agency, serving South Carolina, to see how you can find a good plan.

The Reconciliation Process Has Limits on What You Repay

For a number of people who have inconsistent incomes, like those who are self-employed, subsidy repayment can be a psychological obstacle to signing up in the first place. No one likes the idea of suddenly owing a lot of money at tax time that could nullify any gains they made in income that year, so why go near the health insurance marketplace?

However, the actual reconciliation process isn’t as severe as you might fear. If your income still falls below 400% of the federal poverty level, there’s a ceiling on how much you pay. In 2025, the maximum a single taxpayer would have to pay back is $1,625, or about $135.42 per month. Again, that’s the maximum, so what you might have to pay could be a lot less.

If your income exceeds 400% of the federal poverty level, however, then you’d have to pay everything back. But there’s a way to prevent reaching this point: You can adjust your income during the year. Your state’s marketplace portal has options for updating personal information, so you can adjust your premiums up or down during the year as needed.

Contact Champion Insurance Agency, serving South Carolina, to look at health insurance plans. Don’t let the idea of reconciliation stop you from finding a solid plan.