One of the most important terms for people to understand when preparing to sign up for health insurance is “subsidies.” Essentially, it means help. It means that if your household income is below a certain level, the government will help you pay for your insurance (or subsidize it). This is only an option, however, if you sign up through your state’s marketplace (so it’s not available if you are getting insurance through work).
How do you know if you are eligible? We’ll take a look at that, and a few other things you need to know below.
How do you know if you are eligible? If your household income is between 100% and 400% of the Federal Poverty Line (FPL), you are eligible for some form of subsidy.
There are different types of subsidies. Which ones you are eligible for depends on where your household income falls within that 100%-400% range.
Generally, if you’re under 400%, you will be eligible for tax credits that will help lower your monthly premiums. If you’re under 250% of the FPL, you will be eligible for cost sharing reduction subsidies on silver plans. If you make under 138% (in the states that expanded Medicaid), you may be eligible for Medicaid. Nebraska did not expand Medicaid so if you are in that range, feel free to contact us for help with your application.
If you qualify for subsidies, your plan cannot legally cost you more than 9.5% of your income, after your tax credits are applied.
If your income changes, you should report it because it could have an effect on your subsidies.
Remember, when you report your income, you are reporting your expected income after tax deductions. This is called your Modified Adjusted Gross Income (MAGI).
Are marketplace plans available through independent agencies like Axess Advisors? Yes. You do not have to sign up for a plan through healthcare.gov in order to be eligible for subsidies.
Have further questions? Feel free to contact us at any time and we’ll be in touch!