If you buy health insurance through your state's health insurance Marketplace, also called an Exchange, you may be able to get some financial help. The health care reform law helps lower the cost of health insurance for families with low to moderate incomes who make too much money to qualify for Medicaid.
There are two main types of financial help: premium tax credits and cost-sharing subsidies.
The amount of tax credit you qualify for depends on your income and the size of your family. In addition, households with lower incomes may qualify for subsidies to help lower the cost of doctor visits, hospital stays, and other types of medical care.
What Is a Tax Credit?
You may be able to use a tax credit to save money on health insurance when you enroll in a plan through a state Marketplace. The tax credits help lower your insurance premium, or the payments you make each month for your health plan. You can receive the tax credit in advance by having all or part of the money sent directly to your insurance company. That will lower your monthly bill. You can also pay the full cost of your insurance premium during the year and take your credit instead at tax time.
How Do I Know If I Can Get a Tax Credit?
When you enroll in a plan through your state's Marketplace, you'll see if you can get a tax credit and how much it will be. How much money you can get depends on the size of your family and the amount of money your family makes in a year.
How Much Money Can I Make and Get a Tax Credit?
You may be eligible for a tax credit if the amount of money you expect to make for all of 2015 is in the following income ranges:
- $11,670 to $46,680 for one adult
- $15,730 to $62,920 for a family of 2
- $19,790 to $79,160 for a family of 3
- $23,850 to $95,400 for a family of 4
The less money you make, the more financial aid you can get. These amounts change each year. The income amounts for people who live in Alaska and Hawaii are slightly different.
Can I Get a Tax Credit If I Get Insurance From an Employer?
In general, people who get insurance through an employer probably won't use a state Marketplace. And the Marketplace is the only place where this kind of financial aid is available.
Some people, though, may want to buy a health plan through a Marketplace even though an employer offers affordable insurance. In that case, the employee will not be eligible for tax credits or subsidies, even if the family's income falls within the ranges listed above.