Are you familiar with the provisions under the Affordable Care Act that may provide tax credits for health insurance to your income bracket?

    You might be eligible for subsidies to help cover your healthcare costs. These tax credits are available to low and middle income earners, and will allow these workers to purchase healthcare insurance on the state and federal healthcare insurance exchanges. The lower your income, the higher your subsidy. Please note that subsidies will be paid directly to the insurance company. With that in mind, let’s figure out who is eligible for subsidies and what their share might be.

    Eligibility Factor

    “All Americans are required to carry health insurance as January 1, 2014, or face financial penalties, but if enrolling in coverage through the state exchanges is too expensive or too confusing, uninsured individuals might choose to skip it and pay the fines instead.” (CNN.Money.Com)

    Individuals with an annual income of up to $45,960, and families with an income range from $45,960 to $94,200 are eligible for subsidies under ACA. If you are not already eligible for Medicaid or Medicare, nor do you have affordable coverage through your employer, you are eligible for subsidies that will be paid directly to your insurance company.

    Beginning October 1st, those that are eligible, may begin enrolling in plans via state and federal exchanges. Coverage will begin in January of 2014. The below chart shows annual income for individual income earners and the maximum monthly premium one can expect to pay for the Silver plan (if they do not have access to affordable health coverage from their employer).

    Premiums for individual coverage on exchanges resized 600

    (Source: Finance.Yahoo.Com)

    • Under ACA and through the exchanges, a consumer can purchase from the four levels of coverage: Bronze, Silver, Gold, and Platinum.
    • Enrollees can apply for an advanced subsidy based upon tax returns. Keep in mind that the subsidy level will be adjusted once tax returns for that year have been filed. Additionally, as in all cases, payments go directly to the insurance company.
    • Enrollee can also opt to pay the entire annual premium up front and receive a refund at tax time. (CNN.Money.Com)
    • Anyone earning up to 400% of the poverty level ($45,960 for an individual and $94,200 for a family of four) will be eligible for a subsidy.
    • From the chart above, one can see that for an individual making $17,235/year, they will pay no more than 4% of their income. That breaks down to a monthly health insurance premium of $57. The federal government will cover the rest under the ACA.
    Do you know if you and your family are eligible to receive subsidies? Has your employer discussed your options?

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