How are Health Insurance Subsidies Determined?

Each year during open enrollment individuals are able to see if they are eligible for health insurance subsidies to help supplement their health care costs. The determinations are based on projected adjusted gross income (AGI) for the year compared to the cost of the second lowest silver plan in an individuals state of residence. These two factors along with how many individuals are in the household will determine eligibility to receive assistance.

The only way to receive assistance is to enroll in either your state based exchange or on Documents are required to verify the income that you are claiming is in fact correct. If you qualify for an Advanced Premium Tax Credit (APTC) you may choose how much advance credit to apply to your premiums each month, up to a maximum amount. If you choose to only take a portion of the advanced credit allowed you’ll get the difference as a refundable credit when you file your federal income taxes.

Currently health insurance carriers are submitting their rates for 2016. The rates will either be approved or rejected by the administration and the second lowest silver plan rates will be determined for each geographical area. When receiving a subsidy you have to make sure to report any changes to your circumstance that may change your subsidy eligibility. This will prevent paying a tax penalty at the end of the year. Did you receive a tax subsidy last year? How was your experience with enrollment?

The Kaiser Family Foundation provides a calculator to see if you are eligible for a subsidy, but is currently set with 2015 premium rates until the 2016 second lowest silver plan rates are determined. Remember Open Enrollment Starts November 1st. Check to see if you are eligible to receive assistance HERE

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