How Do Healthcare Tax Credits Work?

Premium tax credits help eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace. Here’s how they work:

What Are Premium Tax Credits?

Premium tax credits are subsidies from the federal government that lower the monthly cost of health insurance premiums.

Eligibility Criteria

1. Income: Household income must be between 100% and 400% of the Federal Poverty Level (FPL).
2. Marketplace Coverage: You must buy your health insurance through the Health Insurance Marketplace.
3. Filing Status: You must file a federal tax return and not be claimed as a dependent on someone else’s return.
4. Citizenship: You must be a U.S. citizen or legally present in the U.S.

How to Apply

1. Choose a Plan: You can either schedule an advisement to review coverage options with one of our licensed Advisors or shop and make a plan selection on your own. 
2. Enroll on the Marketplace: Once you have chosen a plan that meets your needs, the Advisor or your Customer Success Representative (CSR) will access your existing account or create one and complete the application on the federal Marketplace or your state’s Marketplace website on your behalf.
3. Tax Credits Applied: Once you are enrolled in your selected plan, the Marketplace will apply the credit to reduce your monthly premium cost.

Advance Payments and Tax Filing

• Advance Payments: You can have the credit paid directly to your insurer each month to lower your premium.
• Tax Filing: At the end of the year, you’ll reconcile the credit on your tax return. If you received too much, you may need to repay it; if you received too little, you might get a refund.

Premium tax credits are a key tool for making health insurance more affordable. To benefit from them, you must meet the requirements and apply through the Marketplace.