Health insurance subsidies are provided only in the new Marketplace. They are actually instant tax credits and they provide a major benefit to millions of Americans. They will help make health insurance affordable for individuals and their families.
The Affordable Health Insurance Marketplace subsidies are calculated according to income and family size. If your income is between 100% to 400% FPL (Federal Poverty Level), you will be eligible for tax credit subsidies. The subsidy scale is a progressive schedule, so that the higher the financial need for affordability tax credits, the higher the subsidy. The subsidy is also known as the “premium tax credit”. It will offset the price of health insurance for those who qualify as of 2014. The income ranges for 100% to 400% FPL in 2013 are as follows (we expect a slight increase in 2014):
Individual with annual income of $11,490 (100%FPL) to $45,960 (400%FPL)
Family of 2 with annual income of $15,510 (100%FPL) to $62,040 (400%FPL)
Family of 3 with annual income of $19,530 (100%FPL) to $78,120 (400%FPL)
Family of 4 with annual income of $23,550 (100%FPL) to $94,200 (400%FPL)
This chart shows the maximum amount you will be charged for health care premiums based on your income level or FPL levels:
Up to 133% FPL 2% of income
133-150% FPL 3-4% of income
150-200% FPL 4-6.3% of income
200-250% FPL 6.3-8.05% of income
250-300% FPL 8.05-9.5% of income
300- 400% FPL 9.5% of income
For example, if you are an individual and your annual income is $45,960 (400%FPL), assuming you select the baseline silver level plan, your health insurance premium will not cost you more than $332.50 a month. On the other hand, if your annual income is only $11,490 (100%FPL), the same plan will only cost you $20 a month after the tax credit/subsidy.
Most people shopping in the new marketplaces are expected to qualify for some level of subsidy to offset part of the cost of the premiums. Remember though, you must purchase through the Marketplace to get a tax credit/subsidy. If you purchase through a non Marketplace certified agent, you will not get instant credit. You can file for it next year when you file your taxes but you will not be eligible for it now. Be sure your agent is marketplace certified and is correctly writing your insurance policy for you.
Using a Marketplace certified health insurance agent like myself costs you nothing. I can ensure you are getting the best rates with the best company for your needs. I will further ensure you are correctly applying in the Marketplace. This is a great opportunity for so many people to finally be able to afford health insurance. I want to make sure you do it right!
Sherie Samstag Bryan
The opinions voiced in this material are for general information only and are not intended to provide specific insurance or legal advice or recommendations for any individual.