Are you searching for health insurance on the Affordable Care Act (ACA) marketplace and wondering if subsidies are still available? The answer is yes, although they cannot guarantee availability at this time.
Subsidies can help lower the cost of your ACA plan, but they must be determined based on your income level and family size. They may also cover out-of-pocket expenses like deductibles and copayments.
Subsidies aren’t available to people with incomes below the poverty level
If your income falls below the poverty level, Obamacare subsidies won’t apply to you. This is because subsidies are calculated based on estimated earnings during the year in which you enroll in a health plan – not actual earnings during that year.
The Affordable Care Act (ACA) offers two forms of financial assistance to help reduce the cost of health insurance: premium tax credits and cost sharing reductions. The premium tax credit works to lower enrollees’ monthly payments for coverage, while the cost sharing reduction helps minimize out-of-pocket expenses when receiving care.
People whose incomes fall below 138 percent of the poverty level in states that don’t expand Medicaid often face a “coverage gap.” This means they are ineligible for Medicaid, which provides even more financial assistance than premium subsidies alone.
They’re available to people with incomes above the poverty level
The Affordable Care Act (ACA) offers financial assistance to reduce monthly premiums for people with marketplace-based health insurance plans. This assistance takes the form of advance premium tax credits and cost sharing reductions.
The amount of financial assistance you are eligible for depends on your income level and which deductible, copayment, or coinsurance option you select when enrolling in a plan. It also takes into account whether you have a preexisting condition and how frequently your income changes.
It’s essential to note that for 2021-2025, you can still reduce your income for subsidy eligibility purposes by contributing to a health savings account (HSA) or pre-tax retirement plan. Doing this will prevent you from losing the ACA specific MAGI (and therefore subsidies) if your earnings rise above 400% of FPL.
Report your income changes throughout the year in order to avoid having to repay any ACA-specific subsidies in the future. Furthermore, if actual earnings were lower or higher than estimated, then an adjusted tax credit refund may be given.
They’re not available to people who switch jobs
Contrary to what some corporate-funded campaigners claim, ObamaCare actually helps small businesses by giving them tax credits to offer health coverage.
Due to the expensive nature of providing health insurance for small businesses, many have had to forgo employee benefits. The ACA subsidy will enable these smaller firms to attract better-quality staff and retain them longer. It will also enable smaller firms to remain competitive with larger corporations who don’t offer such coverage.
Another consequence of the ACA is that larger businesses with 50 or more full-time equivalent employees must provide health insurance as a condition of employment. Some are cutting back their hours to part-time or moving some employees to full time in order to meet this requirement and receive subsidies.
They’re not available to people who buy their own coverage
ACA subsidies help to reduce monthly premiums and out-of-pocket expenses for health insurance plans purchased through a Marketplace. Individuals and families enrolled in the program are eligible for subsidies based on their household income, which is usually calculated using sources such as wages, salary, foreign income, interest, dividends, and Social Security benefits.
The amount of the subsidy depends on the price of a benchmark plan, which is usually the second-least expensive Silver plan in your area (a bronze plan may also be available on exchange).
Premium tax credits and cost sharing reductions are calculated based on benchmark plan prices, but they increase in size when those costs increase. This was done so that people who purchase their own coverage could afford the second-least expensive Silver plan in their region regardless of how much health care costs were rising elsewhere.
