Health Insurance Subsidies: What You Need to Know
The government provides health insurance subsidies through the Affordable Care Act (ACA) to minimize premiums for individuals and families enrolled in health coverage through HealthCare.Gov or a state health insurance marketplace.
The Two Types of Health Insurance Subsidies:
1. Advanced Premium Tax Credit (APTC): This is a tax credit paid in advance to your insurer to be directly deducted from your health insurance premiums. Each year, your household income and state insurance costs will determine the size of your APTC. If your estimated income differs from your actual income, you will either pay or be paid the difference when you file taxes the following year.
2. Cost-Sharing Reduction (CSR): For eligible enrollees, this financial aid is built into Silver health insurance plans to automatically reduce out-of-pocket maximums, deductibles, and copays. The amount of savings varies year-to-year and depends on the applicant’s income.
Who is Eligible for Health Insurance Subsidies?
Those with household incomes of less than 400% of the Federal Poverty Level may qualify for the APTC. Those with household incomes of less than 250% of the Federal Poverty Level may qualify for CSRs. You may be eligible for both subsidies. If you are unsure of whether you fit these parameters, consult with an insurance professional, as specific eligibility can vary.
How Much Financial Aid Will I Receive?
The ACA intends for no eligible enrollee to pay over 8.5% of their annual income toward health insurance premiums. The lower the income, the higher the subsidy.
How Can I Apply?
The health insurance subsidy application process is built directly into your insurance enrollment. Start by visiting our Health Insurance Quoting Tool, selecting a plan, and beginning an application. During your insurance application, you’ll provide information about your household income and size, which will be used to determine your APTC eligibility. If your income is below 250% of the FPL and you enroll in a Silver plan, CSR savings will also be automatically built in to your plan. For more information, visit HealthCare.gov or give our office a call at (240) 347-1485.
The Open Enrollment period runs from November 1 to January 15 each year. This is a great time to get in touch with your local insurance broker to choose the best plan for your family, to maximize benefits, and to streamline the application process. These subsidies are designed to make health insurance accessible for every family. At Denton & Associates, we’re dedicated to helping you find affordable, quality coverage. Explore our website to learn more about what we can do for you!