Premium Tax Credits for Low-Income

Premium Tax Credits for Lower-Income Individuals
In 2014, a “premium tax credit” will be available to help pay for coverage purchased through the Exchange for individuals and families:
  1. Who do not qualify for Medicare or Medicaid and
  2. Are not offered affordable, minimum value health insurance through an employer,
  3. Taxpayers, with income between 100% and 400% of the federal poverty line (FPL)
  4. Purchasing insurance through an Exchange.
SAMPLE TAX CREDIT FOR PURCHASE IN COVERED CALIFORNIA
% of FPL
Annual Income (family of 4)
Unsubsidized Annual Premium
Tax Credit
Annual Premium After Credit
Monthly Premium After Credit
150%
$35,137
$14,245
$12,840
$1,405
$117
200%
$46,850
$14,245
$11,294
$2,951
$246
300%
$70,275
$14,245
$7,569
$6,676
$556
400%
$93,700
$14,245
$5,344
$8,901
$742
Adjusted 2013 Federal Poverty Guidelines

48 Contiguous States and DC
Note: The 100% column shows the federal poverty level for each family size, and the percentage columns that follow represent income levels that are commonly used as guidelines for health programs.
Household Size
100%
133%
150%
200%
300%
400%
1
$11,490
$15,282
$17,235
$22,980
$34,470
$45,960
2
15,510
20,628
23,265
31,020
46,530
62,040
3
19,530
25,975
29,295
39,060
58,590
78,120
4
23,550
31,322
35,325
47,100
70,650
94,200
5
27,570
36,668
41,355
55,140
82,710
110,280
6
31,590
42,015
47,385
63,180
94,770
126,360
7
35,610
47,361
53,415
71,220
106,830
142,440
8
39,630
52,708
59,445
79,260
118,890
158,520
For each additional person, add
$4,020
$5,347
$6,030
$8,040
$12,060
$16,080
Source: Calculations by Families USA based on data from the U.S. Department of Health and Human Services
Determining eligibility for the premium tax credit
Modified” gross income is calculated which includes Social Security benefits that are not included in gross income for the taxable year.  In addition, some individuals and families will qualify for a cost-sharing reduction subsidy to help with deductibles and co-payments.
How will services be paid?
When an individual receives covered essential health benefits, the provider will collect only the amount of cost-sharing specified in the silver plan variation in which the individual is enrolled. The federal government will pay the insurer in advance the amounts estimated to cover the cost-sharing reductions associated with the specific silver plan variation. HHS intends to propose that this advance cost-sharing reduction payment to the insurer would occur monthly, and that, after the end of the calendar year, the federal government would reconcile the advance payments to actual cost-sharing reduction amounts.
The Exchange Determines Eligibility for Premium Tax Credit and Cost-Sharing Reductions.
Exchanges must have a coordinated system of eligibility so that an individual can simultaneously apply for enrollment, apply for premium tax credits and apply for cost-sharing reductions. Proposed IRS regulations would permit the disclosure of income and other specified information about an individual taxpayer to HHS for purposes of making eligibility determinations for advance payments of the premium tax credit or the cost-sharing reductions.
Ineligibility for the tax credit (groups with over 50 Full Time Equivalent Employees)
As a general rule, if an Applicable Large Employer’s plan constitutes “minimum essential coverage” in that it is both affordable and provides minimum value, merely being eligible for the plan will make an employee ineligible for the tax credit. The final regulations clarify that an eligible employee who declines enrollment in such a plan remains ineligible for the tax credit for each month in the coverage period related to the enrollment period (e.g., for the full plan year in the case of an annual enrollment period).
This information is subject to future guidance and regulations
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