The Affordable Care Act (ACA) offers financial assistance to make health insurance more accessible. Subsidies come in two forms: premium tax credits and cost-sharing reductions.
Subsidies provide individuals and families with financial assistance to protect them against rising health insurance premiums. These refundable tax credits are based on an individual or family’s household income.
Premium Subsidies
Premium subsidies provide assistance to people paying their monthly health insurance premiums. They come in two forms: premium tax credits and cost-sharing reductions.
The premium tax credit helps lower monthly payments for insurance plans purchased through the Marketplace, offering four “metal” levels of coverage: bronze, silver, gold and platinum.
Bronze plans usually offer the lowest monthly premiums, but have higher out-of-pocket expenses when an enrollee receives covered health care services. While more costly than silver or gold plans, bronze options tend to be less pricey than platinum options.
Individuals whose household incomes fall between 100% and 250% of the federal poverty level may qualify for a premium tax credit. Furthermore, these individuals receive cost-sharing reductions that make deductibles and copays more like silver plans’.
Cost-Sharing Subsidies
The Affordable Care Act (ACA) offers financial assistance to reduce deductibles, copayments and other cost-sharing charges for people who purchase Marketplace plans. These cost sharing reductions (CSRs) are available to enrollees on the health insurance Marketplace on a sliding scale based on income.
CSRs (cost sharing reimbursements) can make silver plan coverage more accessible for lower income consumers, especially families with large deductibles or other cost sharing requirements. Unfortunately, these CSRs may not be enough for all consumers.
For the most generous cost sharing reductions, a person must fall below 150% of the federal poverty line. Unlike premium tax credits, these reductions aren’t available to consumers with incomes above 250 percent of this level.
Subsidies for cost-sharing reduction are not paid directly to insurers, but rather by the federal government. Up until late 2017, each insurer was reimbursed annually by the federal government for these upfront expenses. Unfortunately, in late 2017 the Trump Administration stopped making these payments to insurers.
Tax Credits
Health insurance tax credits are a type of subsidy that can reduce monthly premiums and help pay for insurance. They’re an integral component of the Affordable Care Act and can be claimed throughout the year to lower monthly bills; or you can claim them along with your tax return to reduce overall tax obligations or boost any refund received.
The Affordable Care Act’s tax credit can help you save money on health insurance, but it’s essential to understand its workings in order to maximize your benefits. For instance, report any changes in income promptly so that your credit is calculated accurately.
Another way to help avoid paying back your APTC is by making sure your family does not exceed the maximum income limit for their size and age group. Doing this will limit how much assistance from the APTC you receive each year.
Eligibility
The Affordable Care Act (ACA) offers subsidies to make health insurance more accessible for many Americans. These premium subsidies are funded by the federal government through a tax credit.
People who purchase health insurance on the ACA Marketplace can access subsidies in the form of tax credits and cost-sharing reductions.
Premium subsidy eligibility is determined by income and family size. For instance, a family of four at the lower end of income eligibility (150 percent of poverty) would receive an estimated subsidy amount of $13,000 annually.
Furthermore, the Affordable Care Act prohibits health plans from charging higher premiums to young adults under 26. This restriction applies both to job-based and individual market policies.
Under the Affordable Care Act (ACA), plans and issuers providing dependent child coverage must continue coverage until their dependent reaches age 26. This requirement applies to both married and unmarried children alike.
