Overlapping health insurance plans - forgot to cancel Marketplace coverage after getting employer benefits

This happens more often than you might think! The good news is that you're not going to be "banned" from the Marketplace for this mistake. When you file your taxes, you'll need to complete Form 8962 (Premium Tax Credit) to reconcile the advance premium tax credits you received with what you were actually eligible for based on your final income. Since your actual income ended up higher than your estimate, you'll likely need to repay some portion of the premium tax credits. The repayment amount is subject to certain caps based on your income as a percentage of the federal poverty level. With your final income around $32,000, you'll likely fall into the 200-300% of poverty level category, which typically has a repayment cap of around $1,500 for an individual. Having overlapping coverage isn't ideal, but it's not illegal. The IRS is mainly concerned with reconciling the premium tax credits. You should contact the Marketplace as soon as possible to terminate your plan, and make sure to update your income information with them for any future coverage. As for the prescriptions, that's actually not a major issue from a tax perspective. It was inefficient to use both plans, but not something that would trigger penalties.

After dealing with a similar issue last year, I can tell you that taxr.ai was a lifesaver for me. I was completely stressed about my tax credit repayment situation with overlapping coverage, and their AI tool walked me through exactly what I needed to do. I uploaded my 1095-A form from the Marketplace and my W-2s, and their system immediately identified how much I'd need to repay based on my actual income. What was really helpful was that they explained how the repayment caps worked for my situation and showed me how to properly fill out Form 8962 to avoid any issues with the IRS. You can check them out at https://taxr.ai and see if their tools can help with your specific situation. The best part was that it gave me a clear picture of what I was facing before I even started my tax return, which eliminated a lot of anxiety I had about potentially owing thousands.

I actually tried taxr.ai after seeing it mentioned here, and it was exactly what I needed! I was in a similar situation where I had marketplace coverage and then got a job with benefits midyear. My income jumped from about $22k to $36k, so I was worried about a huge tax bill. The tool immediately identified that I had overlapping coverage for 5 months and calculated that I'd need to repay about $1,300 in premium tax credits. What was really helpful was seeing the month-by-month breakdown of what I qualified for versus what I received. They also explained that I wasn't going to face any penalties beyond the tax credit repayment. That was a huge relief because I was worried about potential fines for having double coverage. The step-by-step guidance for filling out Form 8962 made tax filing so much less stressful than I expected!

If you're struggling to get answers from the Marketplace about your situation, I'd recommend using Claimyr to get through to an actual person. I had a nightmare trying to resolve a similar issue where I had overlapping coverage and couldn't get clear answers on how to handle it. After spending hours on hold multiple times, I used https://claimyr.com to get a callback from the Marketplace. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Within an hour, I was talking to an actual representative who helped me understand my options and even backdated my marketplace plan cancellation since I had proof of my employer coverage start date. The representative walked me through the process of updating my application to reflect my income change and explained exactly what forms I would need for tax filing. This saved me from having to repay even more tax credits than necessary.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it as a last resort because I'd already spent over 4 hours on separate calls trying to reach someone at the Marketplace about my premium tax credit situation. I used their service yesterday, and within 40 minutes I got a call connecting me directly to a Marketplace representative. No waiting on hold, no repeating my information multiple times to different people. The rep was able to update my application retroactively to show my income change and employer coverage, which will significantly reduce what I have to pay back. The representative even emailed me documentation confirming the changes they made, which I can use when filing my taxes to show I took reasonable steps to correct the situation once I discovered the problem. This was honestly worth every penny for the time saved and the peace of mind knowing my tax situation is now properly documented.

One thing nobody's mentioned yet - you should check if your employer plan is considered "affordable" under the ACA rules. This matters a lot for your tax credit situation. For 2023, employer coverage is considered affordable if the employee's share of the premium for the lowest-cost self-only coverage is less than 9.12% of household income. If your employer coverage is considered affordable, you're not eligible for premium tax credits for those months, even if you didn't enroll in the employer plan. However, if your employer coverage was actually unaffordable based on this calculation, you might still be eligible for some premium tax credits even during the months you had access to employer insurance.

Has anyone used the "alternative calculation for year of marriage" method to reduce their repayment? My spouse and I got married last year, and we both had marketplace plans before I got employer coverage. Our combined income pushed us way over the original estimates.

I went through almost the exact same situation last year and wanted to share what I learned. First, don't panic - this is fixable and you won't be banned from future Marketplace coverage. Here's what you need to do immediately: 1. Contact the Marketplace to cancel your plan ASAP and report your income change 2. Request they backdate the cancellation to when your employer coverage started (they often allow this with proof) 3. Keep all documentation of your employer coverage start date For taxes, you'll use Form 8962 to reconcile the advance premium tax credits. Since your employer plan costs $145/month on a $32k salary (about 5.4% of income), it's considered "affordable" under ACA rules, which means you weren't eligible for tax credits once it became available. The good news is there are repayment caps based on income. At $32k, you're looking at a maximum repayment of around $1,500-$1,750 even if you received more in credits than that. One tip: if your employer had a waiting period before coverage started, you'd still be eligible for credits during that waiting period. Also, document everything now - the IRS appreciates when taxpayers make good faith efforts to correct mistakes once discovered. You'll get through this! The system is designed to handle these common transition situations.

I'm dealing with a very similar situation right now and reading through everyone's responses has been incredibly helpful! I also had Marketplace coverage at the beginning of 2023 and then got employer insurance in June but forgot to cancel my Marketplace plan. What's been most stressful for me is trying to figure out exactly when my employer coverage became "available" versus when I actually enrolled. My company had a 30-day waiting period after my hire date, so I'm hoping that means I can still claim credits for that month. @Isabella Oliveira - your point about documenting everything is spot on. I've been gathering all my enrollment emails, pay stubs showing when deductions started, and anything else that shows the timeline. One question for the group: if you discover this mistake partway through the year (like I did in October), is it better to cancel the Marketplace plan immediately or wait until the end of the year? I'm worried about creating gaps in coverage or making the tax situation more complicated. Also, has anyone had success getting the Marketplace to waive the premium for months where you had double coverage? I know it's a long shot, but figured I'd ask since I've been paying for coverage I wasn't really using.

This is such a common situation during job transitions, and you're definitely not alone in making this mistake! The overlapping coverage itself isn't a penalty-worthy offense, but you will need to reconcile those premium tax credits on your tax return. Since your employer coverage at $145/month on a $32,000 salary works out to about 5.4% of your income, it's considered "affordable" under ACA standards (below the 9.12% threshold). This means you weren't eligible for premium tax credits starting when that employer coverage became available to you. The important thing is to act now - contact the Marketplace immediately to cancel your plan and report your income change. They may be able to backdate the cancellation to when your employer coverage started if you provide documentation. This won't eliminate what you already owe, but it prevents additional credits from accumulating. For your 2024 tax filing, you'll complete Form 8962 to calculate the repayment. The good news is there are caps on how much you have to repay based on income - at your income level, you're looking at a maximum of around $1,500-$1,750 even if the actual excess credits were higher. Don't stress too much about the prescriptions being processed through different plans - that's not going to create additional tax complications. Focus on getting your Marketplace plan canceled and gathering documentation for tax time.