Many Californians are concerned about how they will afford health insurance when the individual health care mandate goes into effect in January 2014 as part of the Affordable Care Act. To address this concern, the Affordable Care Act stipulates that individuals who do not have access to employer-based health insurance or government-based programs may be eligible for a tax credit or cost-sharing subsidy to help pay for coverage.
Who Qualifies for Tax Credits
Individuals who make between 138% and 400% of the federal poverty level (FPL) may be eligible for a tax credit. The federal poverty level is based on family income and the number of people in the family. The amount of the tax credit is based on a sliding scale, so that people with lower incomes qualify for more financial support than those with higher incomes. Based on the current FPL, this means that an individual making up to $44,680, and a family of four making up to $92,200, could qualify for a tax credit.
Some Facts About Tax Credits
- They can help lower premium costs
- They can be used at the time of enrollment in a plan through the health insurance exchange
- They can be adjusted at the end of the year based on actual income
What Are Subsidies, and Who Qualifies?
Individuals in California who make less than $27,936 and families of four that make less $57,636 (which represents about 2.5 times the FPL), may be eligible for subsidies to reduce the monthly premium payments, in addition to tax credits. These cost-sharing subsidies help reduce health care expenses, such as copayments and coinsurance, and are offered by the federal government.
Consult an Expert for Help
Navigating the new health care laws can be challenging, so it’s important to consult with a professional to understand all of your options. The experienced insurance experts at Benefit Packages closely follow the changing healthcare landscape. We will be an Exchange Certified Agency and will work with you to find a suitable health plan, whether in or outside of the health insurance exchange. Visit our website or call us for more information.