Did you know you may be able to get financial help to lower how much you pay every month for health insurance? Known as “premium tax credits,” these can help make insurance more affordable. And over 80% of people nationwide will qualify for financial help.
To get help right away, the premium tax credit can be taken “in advance.” “In advance” means that the federal government pays part of your monthly premium directly to your health plan. You pay a lower premium, minus the premium tax credit. For example:
Your monthly premium = $300
Federal premium tax credit to the health plan = $240
What you pay to the health plan = $ 60
You don’t have to take the premium tax credit in advance. You can wait until you file your federal tax return to get your premium tax credit.
It may surprise you how much you can earn and still be eligible for help. If you are single, you can make more than $46,000 a year and still get the premium tax credit. Families of four can make more than $95,000 and still get help.
To qualify for premium tax credits, you must:
- Purchase your health plan from an ACA Marketplace like Covered California;
- Be income eligible;
- File your taxes jointly if you are married; and
- Not be eligible for “minimal essential coverage” from an employer, Medicaid, Medicare or certain other forms of coverage.
If you are worried about estimating your income wrong and what that might mean when you file your taxes, see our fact sheet on “tax reconciliation.”
To learn more about the premium tax credit and how it can help lower your monthly health insurance premium, see Consumers Union’s health tax credit tool. Did a premium tax credit help you afford coverage you wouldn’t have otherwise bought? Share your story with us here.