The End of Employer-Provided Health Insurance: Why It's Good for You and Your Company

Chapter 6Premium Tax Credits: Are You Eligible for the Subsidy?

Depending on your family's size and income, you may be eligible for new federal subsidies—called premium tax credits—that cap your cost of health insurance as a percent of your household income. These tax credits will only be available for plans purchased through your state's Health Insurance Marketplace (also called the Exchange), which we discuss in Chapter 8. In this chapter, we will help you determine if you and your family are eligible for a premium tax credit.

Here are some quick facts about premium tax credits:

• Premium tax credits are only available to you and your family if you meet certain income and household size requirements.
• Premium tax credits are only available for plans purchased through the Health Insurance Marketplaces.
• Premium tax credits are advanceable and can be automatically sent monthly to the insurance company by the Health Insurance Marketplace—you do not need to wait until you file a tax return at the end of the year to receive your credit.
• Premium tax credits will be reconciled at the end of the year based on your actual income.

Are You Eligible for Premium Tax Credits?

Your family's eligibility for a premium tax credit is based on a standard, called the federal poverty level, or FPL. The FPL, which is set annually by the federal government, takes into account the number of people in your household and your annual household income (see Figures 6.1 and 6.2). Specifically, if you and ...