- Am I eligible?
- How much relief will I get?
- How do I claim the benefit?
- Who should I talk to?
Let’s take these important questions in order
- Am I eligible for PREMIUM TAX RELIEF AND COST SHARING REDUCTIONS?
Almost certainly! Well over 80% of people who enrolled through the Health Exchanges for 2019 (over 10 million people and their dependents) had the benefit of premium tax relief.
The upper-income limit for premium tax relief is 4x the Federal Poverty Level (FPL). For a family of 2 this set at $65,240 and for a family of 4, $103,000.
If your household income is below these limits you will be entitled to premium tax relief.
If your household income is less than 2.5x the FPL you will be entitled to cost-sharing reductions, on your co-pays and co‑insurances. NOTE. CSRs are only available on Silver plans but for most people offer lower overall costs and greater security.
2. How much RELIEF will I get?
As you can see this depends on the size of your family and your household income. There are variations between States but these must be more generous than the Federal limits.
As a guideline, in 2019 subsidies averaged over 85% of the premium amount.
Subsidy (premium tax relief) is based on the cost of a ‘silver’ metal plan or as legislated by your state. It is, therefore, possible that your essential health insurance cover, based on a Bronze plan, can be Free!
3. How do I claim the BENEFIT?
First, you are only entitled to premium tax relief if you purchase your health insurance coverage via an Exchange (Federal, State or Private).
There are two ways.
- You can claim your premium tax subsidy in advance. It will be paid to your health insurer throughout the year and deducted from your monthly premiums. It is estimated that the average monthly premium (2020) for a family of 4 will be approximately $1500. Don’t be alarmed! The average tax subsidy is over 85% which would make the net payment $225 per month. That is what puts the ‘AFFORDABLE’ into the Affordable Care Act. Remember these benefits apply only to ACA compliant coverage bought through an Exchange (the Marketplace).
Note When you apply you will need to confirm your circumstances to establish your eligibility for premium tax relief. This is fairly straightforward but if you are self- employed or have an irregular income it may be simpler to claim the tax credit when you file your tax return next Spring (see below).
- Alternatively, you can claim your entire tax relief when you file your tax return next Spring. As noted above, this may suit applicants with fluctuating incomes, e.g. self- employed or commission/bonus related. In most cases, families will benefit from the security of lower, fixed price coverage.
The CSR benefits are automatically included in silver plans for those families that qualify (your exchange will advise you at the time of application). If you qualify for CSR, silver plans offer extremely good value, especially if you anticipate frequent trips to the Doctor’s surgery or regular need for prescription drugs. The premiums will be higher than for bronze plans but they offer better coverage and the out of pocket maximum will be lower.
4. Who should I talk to?
If you are renewing your coverage, take the time to consider any change in your circumstances since this time (open enrollment 2019) last year.
What does the future hold? Can you predict any events that might affect your family’s health insurance needs? Confidentiality is assured so discuss these changes with your current insurer. Were you happy with their service? Did your in-network providers have the capabilities you need now? Is your coverage still ‘best value?’
Do not roll-over without asking questions!
BEFORE YOU SAY YES
Talk to an exchange (Federal, State or Private)
All exchanges will give free, unbiased advice. The private exchanges such as TrueCoverage, generally offer a more flexible approach and take a wider view of health and care insurance. While Vision, Dental and Hearing insurances do not attract ACA benefits they complete the healthcare umbrella in a single package.