If you do not get health insurance through an employer (and nobody in your family does either), you will likely be getting health insurance on the Exchange. In Pennsylvania, there is no state exchange, so you would use the Federal Exchange. In getting coverage on the Exchange, you could be eligible for a tax subsidy if the following requirements are met:
- You must be a citizen of the United States.
- Affordable Coverage must not be available through an employer (Affordable coverage is defined as coverage that is expected to cover at least 60% of the expected costs of the health plan and that no individual pays more than 9.5% of their income (based on their W-2 with that employer) towards health insurance costs.
- Your household income is between 100 and 400 percent of the federal poverty level (FPL). For individuals in 2013, 100 percent FPL is $11,490 and 400 percent FPL is $45,960. For a family of four, 100 percent FPL is $23,550 and 400 percent FPL is $94,200.
- Health insurance must be purchased through the federal/state public exchange.
- You are not eligible for Medicaid.
A good tool to calculate the amount of the premium you would be eligible to receive is with this subsidy calculator. The subsidies would be paid directly to your insurance company to be deducted from your monthly premiums.
Open enrollment in the Marketplace/Exchange begins on October 1st, so we should know the rates for Pennsylvanians before then. Other states setting up their own exchanges have come out with a very wide range in estimated premium changes. New York State made news on July 10th by announcing that individual premiums will, on average, decrease 50% under Health Care Reform.
Oregon, Rhode Island, California and other states have also come out with data showing small increases or decreases to small group and individual premiums. However, other states such as Ohio are predicting large increases.
Premium impact will also vary based on the age and health status of the individual as well as their ability to qualify for tax subsidies.
How is my estimated income for 2014 calculated?
This is one potential issue with the tax subsidy. The 2014 subsidy (which is paid throughout the year to your insurance company) will be based on your 2012 tax return. This means that if your income is higher in 2014 than in 2012, you will have to pay back some of that subsidy on your 2014 tax return. On the other hand, if you make less in 2014 than in 2012, you will get a refund on your 2014 tax return.
By: Liz Kennon