When the Affordable Care Act was enacted, it was determined that everyone was required to maintain health insurance. Yet, the federal government also understood that not everyone was in a position to afford health care premiums. As a result, the government designed the system of the health care subsidy. This system was designed to help people under a certain income level afford the premiums of their healthcare coverage purchased through the Federal Marketplace.
Depending on the circumstances, a person may be eligible for a refundable tax credit called the premium tax credit. This is a health care subsidy that is provided by the IRS. There are specific criteria that must be met in order for a person to receive this credit. First, the person must have an income that is at least 100 percent and no more than 400 percent of the federal poverty limit.
In addition, the person applying for this credit must file single, unless a victim of domestic violence and must not be a dependent on another person’s tax filing. In addition, the person must not be eligible for affordable health insurance through his or her employer and must purchase his or her insurance through the Marketplace. If these criteria are met, the person will be eligible to receive the premium tax credit to subsidize the cost of healthcare.
A person who is not eligible for the premium tax credit may still be eligible for the cost-sharing subsidy when paying for health insurance. This subsidy is a lower amount than the premium tax credit, and therefore can assist families in a different tax bracket. To be eligible for the cost sharing subsidy, your income must be less than 250 percent of the federal poverty level.
A person or family that fits this income description and purchases a Silver plan from the Federal Marketplace will see the cost-sharing subsidy built into the plan. The result will be reduced out-of-pocket medical costs. For instance, deductibles will be significantly reduced and co-pays will be much lower than those who are not enrolled in cost-sharing subsidies. This program allows insureds to save money on their out-of-pocket expenses, the most expensive factor in many healthcare plans, while maintaining full health coverage.
To learn more about health care subsidies contact the professionals at HealthcareInsurance.company at (855) 401-8383. Our licensed insurance experts will be happy to answer any questions you have.