Next year, when we do our taxes for 2025, if we actually make more than our projected income (likely) and this higher income now makes the employer plan "affordable" during 2025, can the IRS claw back all of the premium tax credits that we received for 2025?
No.
Are there protections in place if our income varies every year and our income estimate on the ACA application is different when we file our taxes?
Yes.
From page 4 of the IRS instructions for Form 8962, emphasis added:
"Employer-sponsored coverage. Even if you and other members of your tax family had the opportunity to enroll in a plan
that is MEC offered by your employer for 2023, you are considered eligible for MEC under the plan for a month only if the
offer of coverage met a minimum standard of affordability and provided a minimum level of benefits, referred to as “minimum value.” The coverage offered by your employer is generally considered affordable for you if your share of the annual cost for self-only coverage, which is sometimes referred to as the “employee required contribution,” is not more than 9.12% of your household income. The coverage offered by your employer is generally considered affordable for the other members of your tax family allowed to enroll in the coverage if your share of the annual cost for coverage for yourself and the other members of your tax family allowed to enroll in the coverage is not more than 9.12% of your household income. If your employer coverage is affordable for you but not affordable for your other family members, you may be able to take the PTC for your other family members if they enroll in a Marketplace qualified health plan.
However, employer-sponsored coverage is not considered affordable if, when you or a family member enrolled in a qualified health plan, you gave accurate information about the availability of employer coverage to the Marketplace, and the Marketplace determined that you were eligible for APTC for the individual’s coverage in the qualified health plan. In addition, if you or your family member enrolls in employer-sponsored coverage for a month, you or your family member is considered eligible for employer-sponsored coverage for that month, even if the coverage does not satisfy the affordability and minimum value standards. Finally, if your employer offered coverage for you but not your family, you may be able to take the PTC for your family members. For more information on affordability and minimum value, see Pub. 974."
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https://www.irs.gov/pub/irs-pdf/i8962.pdfThe example which follows points out that if you don't provide your employer plan information to the ACA marketplace then you're not eligible for PTC. Since the cost of the employer plan, the affordability percentage, and your income changes each year, if you wanted to be very safe you would inform your ACA marketplace of that information on your application at least annually at reenrollment time. Reading between the lines, the marketplace will determine affordability at the time you apply based on your estimated income, not your actual income.
Two other things FYI:
1. The "affordability percentage" changes from year to year based on a federal formula. In 2023, it was 9.12%. I'm not sure what the number will be for 2025 but it's probably google-able.
2. You mentioned "we" in your original post as well as your employer's "self only" coverage amount. The government recently instituted an affordability rule that changes the rules for affordability to include family members. From the first page of the Form 8962 instructions:
"New employer-coverage affordability rule for family members of employees. For tax years beginning after December
31, 2022, for purposes of determining eligibility for the PTC, affordability of employer coverage for an employee’s spouse or dependents allowed to enroll in the employer coverage is no longer based on the cost of covering only the employee.
Affordability of the employer coverage for these family members is now based on the employee’s cost for coverage of the employee and these other family members."
