FINANCIAL ASSISTANCE FOR HEALTH INSURANCE

Many individuals and families purchasing health insurance can receive subsidies to help cover premiums and out-of-pocket costs. There are two main types of subsidies:

These tax credits reduce your monthly health plan payments. They are available to those with incomes between 100% and 400% of the federal poverty level. You can apply this credit to any metal level plan (platinum, gold, silver, or bronze).

Cost-sharing reduction programs help lower your out-of-pocket expenses. They provide discounts that decrease your costs before your insurance begins to pay. This includes reductions in deductibles, copays, and coinsurance. To qualify for these discounts, you must select a silver metal level plan.

To determine your tax credit, you'll need to complete an application on your state's Health Insurance Marketplace. The Marketplace will use three key pieces of information from your application:

1. Your household size
2. Your estimated household income
3. The average price of plans in your area (benchmark plan)

Using this information, your state’s Marketplace calculates your premium tax credit as follows: Benchmark Plan Cost - Premium Contribution = Your Premium Tax Credit

Every year, your state’s Health Insurance Marketplace selects a new benchmark plan, which is always the second-lowest cost silver plan available in your area. This means your monthly premium and tax credit can change yearly, depending on adjustments to your income and household size.

If you qualify for a tax credit, you have two options to receive it:

• Apply it to your monthly premium: You can use your tax credit to lower your monthly payments. The Marketplace will send this amount directly to your insurance company, and you’ll only pay the remaining balance.

• Claim it when filing your tax return: If you prefer, you can wait to claim your tax credit until you file your tax return. If you used part of the credit for your monthly payments, you can claim the rest when filing.

Keep in mind that if you receive more in advance than you are eligible for, you will need to repay the excess when you file your taxes. Conversely, if you received less, you will get the difference back as a refund.

Here are some general guidelines for eligibility:

• Individuals: Income below $51,520

• Couples: Household income below $69,680

• Four-person families: Household income below $106,000