CHICAGO, IL–(Marketwire – Feb 13, 2013) – GoHealthInsurance, a leading online exchange for individuals and families to compare health insurance quotes, has four facts about the health reform tax subsidies that consumers should know.
“Among the many provisions of the Affordable Care Act taking effect in 2014 is the distribution of premium tax subsidies for individuals and families who qualify,” says Mark Colwell, Manager of Consumer Marketing at GoHealth. “It’s our goal to help consumers understand the premium tax subsidies and whether or not they can expect one in 2014.”
Four facts about the premium tax subsidies:
1. Eligibility requirements
To qualify for a premium subsidy, you must be a U.S. citizen or legal immigrant with an income between 133 and 400 percent of the federal poverty level (FPL) and buy health insurance coverage through one of the new health insurance exchanges. As of 2013, 133 percent of the FPL is $15,282 for individuals and $23,550 for a family of four. 400 percent of the FPL is $45,960 for individuals and $94,200 for a family of four.
2. Health care subsidies are provided on a sliding scale
People who make less money will receive more help than those with incomes closer to 400 percent of the federal poverty level. Example: a family of four making $33,075 annually (150 percent of the FPL) will be required to pay 4 percent of their income, or $1,323, on health insurance premiums. In contrast, a family of four with annual income $88,200 (400 percent of the FPL) is expected to pay 9.5 percent of their income on premiums.
3. Subsidies for those with employer-sponsored coverage
The only way that an individual with employer-sponsored coverage will be eligible for a subsidy is if their employer’s health insurance benefits are deemed unaffordable by the Affordable Care Act. To be unaffordable, the employer coverage would cause the out-of-pocket cost to the employee to exceed 9.5 percent of their income.
4. Subsidies will be refundable and can be paid in advance
Premium tax credits will be refundable. Therefore, taxpayers who have little or no income tax liability can still take advantage of the benefit. An individual’s premium tax credit can be paid to their health insurance company in advance to help cover the cost of premiums.
