One of the features of the Affordable Care Act is that persons who qualify receive up front tax credits (actually paid to the insurance company) to cut the overall cost of premiums for health insurance. It is good for those who receive such credits, except a number of articles are beginning to appear which indicate hundreds of thousands of consumers could owe back some of that money next April.

Remember, a tax credit is the amount of money that a taxpayer is able to deduct from the amount of tax that they owe. It is not the same as deductions and exemptions, which reduce the amount of income that is taxable, tax credits reduce the actual amount of tax owed. Governments grant tax credits to promote a specific behavior, such as replacing older appliances with more efficient ones. It is a dollar for dollar reduction, so if one owes $1,000 in taxes and has $100 in tax credits, that person is only required to pay $900 as payment in full.

Some who accepted the premium tax credit for health insurance may find that they owe $600 or $1,500 or $2,500 or even more when taxes are due. Why is this? Well, when a person who qualified for a premium tax files a 2014 tax return next year, the Internal Revenue Service will compare actual income for the year with the amount estimated when applying for exchange-based health insurance. And, it is not that people were necessarily misrepresenting their income, for some, especially self-employed, income can fluctuate greatly from year-to-year.

I personally think after 30+ years of dealing with health insurance that it is complicated enough without bringing in the US Tax Code. But, that is the way the ACA is set up and for some, the expression the government "giveth" and the government "taketh away" may be a brutal fact. Of course, in fairness, the government cannot just say, "Never mind, just keep it." Matters have to be settled.