Many Americans are eligible for premium subsidies to help offset the costs of their health insurance through the Affordable Care Act marketplace plans. These credits can be directly applied to their ACA marketplace plans.
To qualify, your household income must fall below 400% of poverty. With the passage of the American Rescue Plan and Inflation Reduction Act, more individuals could become eligible for free Bronze plans without premium costs.
Eligibility for Premium Subsidies
Individuals and families purchasing Marketplace coverage who fall below 400% of the federal poverty level may qualify for premium subsidies in exchange for selecting a silver plan in their area and contributing no more than 8.5% of their monthly income towards premium payments and out-of-pocket costs.
Note that FPL numbers change every year. To assess whether you qualify for premium subsidy assistance from NY State of Health, open enrollment or special enrollment periods triggered by qualifying life events are compared with prior year FPL figures in order to assess if premium subsidies apply.
The COVID-19 pandemic brought with it legislation designed to increase Marketplace insurance affordability over two years, by expanding premium subsidies up to 150% of FPL for enrollees with incomes between 100% and 150% of FPL. Unfortunately, however, this law did not change the 8.5% rule which will remain in effect through 2025; additionally tax credit subsidies only apply when buying plans through Marketplace instead of standalone prescription drug plans or short-term policies.
Eligibility for Medicaid
Many individuals who purchased Affordable Care Act health insurance through the Marketplace receive premium subsidies that reduce their monthly payments, depending on household income. Starting in 2021, subsidies will cap at 400% of federal poverty level (FPL). To take advantage of these benefits, silver plans with moderate monthly premiums and cost sharing reductions (which reduce how much is spent on deductibles, copayments and coinsurance payments) must be selected; otherwise you risk not qualifying.
Most states have expanded their Medicaid programs to cover low-income adults. You may qualify if your household income falls within 133% of the FPL or you meet other eligibility requirements.
The Affordable Care Act established a common set of rules and application for determining financial eligibility across health coverage programs such as Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) Marketplace, as well as creating a standard way to measure household income: Modified Adjusted Gross Income or MAGI calculations which take into account income from all sources including wages, salary tips and self-employed earnings.
Eligibility for a Special Enrollment Period
People experiencing life events such as losing other health insurance, moving, having a baby or any other qualifying life event have the ability to enroll in marketplace coverage outside of open enrollment without waiting until its annual open enrollment window opens. Such events qualify for special enrollment periods during which individuals can select an ACA-compliant plan starting the first of the next month.
Marriage, in addition to other life events, may activate a special enrollment period on health exchanges for individuals who qualify for premium tax credits and those in the coverage gap (whose household income falls below 150% of poverty level), however it does not apply to Medicare coverage or employer-based policies; its expiration is scheduled for 2022. eHealth offers many plans that are affordable yet compliant with ACA standards for both individuals and families alike.
Eligibility for a Premium Tax Credit
Prior to 2021, the Affordable Care Act (ACA) only permitted people to qualify for advance premium tax credits (APTC) if their household income fell between 100% and 400% of poverty level. As part of the COVID-19 pandemic response legislation passed during 2021 and 2022 allows households to qualify for APTC as long as the benchmark silver plan cost does not exceed 8.5% of household income.
The Advance Premium Tax Credit is paid throughout the year in installments and reconciled when filing their annual income tax return. Enrollees can use their APTC to cover any marketplace health plan meeting ACA criteria – either on or off of an exchange platform.
However, most marketplace participants typically use the APTC to purchase bronze and silver plans with lower monthly premiums and out-of-pocket costs from bronze marketplace plans available through the exchanges. Furthermore, platinum and gold plans with their higher monthly premiums and reduced out-of-pocket costs may also be purchased using this tool.