Tips for Getting a Subsidy to Lower Health Insurance Cost
Obtaining a health insurance policy can be very costly and so not everyone is able to afford one. However, the Affordable Care Act enacts that every US citizen must have a health insurance policy. The good news is that when Obamacare was established, it was known that not everyone would be able to pay for the cost of their health insurance premium, and so a subsidy was created in order to aid those who were not able to do so. Here are a few things you need to know in order to ensure that getting a subsidy for your health insurance runs smoothly.
Premium Tax Credit
One of these subsidies is called the Premium Tax Credit. This is designed to help citizens pay for their health insurance policy’s monthly premiums. In order to determine whether or not you qualify for such a subsidy and to obtain the financial help that you need, it is crucial that you understand exactly how this subsidy works.
How to Apply
In order to apply for a premium tax credit, you must go to the health insurance exchange that is set up in your residing state. This is important since if you seek out a health insurance policy elsewhere, you will not be eligible for a premium tax credit.
Knowing If You Qualify
Those that make an income of between 100% and 400% of the federal poverty level will be able to qualify for a premium tax credit subsidy. The Federal poverty line can change from year to year, and depends not only on your income but also your family size.
How Much Money Can You Get?
In order to determine the amount that you will receive through your premium tax cut you must be aware of two things. Firstly, you must know the contribution that you will be able to lend toward the cost of your policy. Secondly, you must be aware of the cost of your health plan. The subsidy that you will receive will be the difference between what you are able to contribute and the cost of your health insurance plan.
Do You Have to File Your Taxes Before You Can Receive the Subsidy?
You will not have to wait until your taxes are filed in order to receive your subsidy, in fact you will be able to obtain the premium tax credit well in advance. On top of this, if your income level is lower then what is required to file taxes, you will still be able to receive the subsidy. Keep in mind that if you prefer, you can receive your subsidy as a tax refund upon filing your taxes instead of receiving the pay out in advance.
How to Receive Your Money
If you decide to receive your subsidy in advance then the Federal government will send the money to your health insurance company for you. This means that you will never actually have the money in your hands. Your health insurance company will then credit the money towards your health insurance premium, which will decrease the amount you pay every month. On the other hand, if you decide to receive your subsidy through a tax refund then the money will be added on to your refund once you file your taxes. Keep in mind that although this often means a large tax refund, it also means you will have to pay a higher price every month for your health insurance.
If You Do Not Purchase a Health Insurance Policy
If you choose to not buy a health insurance policy then you will be subject to paying a fee of $95 for each adult in your household and $50 for each child. However, some people will be exempt from having to pay this penalty.
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