Health Insurance Tax Credit Calculator
Starting in 2014, massive tax credits will be available to help you buy individual health insurance coverage through new state-based health insurance marketplaces. The tax credits will only be available to you if you enroll in health insurance through your state's health insurance marketplace. If you are eligible for these health insurance tax credits, they will cap your cost of health insurance at 2% - 9.5% of your household income.
The health insurance tax credits are available for individuals and families who meet certain income requirements and do not have access to affordable health insurance through their employer or another government program.
Eligibility for tax credits is based on a standard, called the "federal poverty level," that looks at your household income and the number of people in the household. The size of the tax credit is based on a sliding scale, with those who make less money getting a larger financial support to lower the cost of their insurance coverage. Individuals and families who make between 138 percent and 400 percent of the federal poverty level may be eligible for a tax credit. This means that an individual making up to $45,960 and a family of four earning up to $94,200 may be eligible for a tax credit.
This calculator provides an illustrative example derived from certain assumptions. Premiums are based on Congressional Budget Office (CBO) estimates (March 2012, July 2012) of 2016 premiums for the second lowest-cost silver family plan, deflated by 5.7 percent annually to estimate 2014 premiums. The individual premium is estimated based on CBO ratio of single to family premiums (November 2009). Age-adjusted premiums for each household member are aggregated into a family premium, using the methodology outlined in final federal regulations released in February 2013.
For individuals with household income below 400 percent FPL who purchase coverage in the Exchange, the law limits individuals' premium contributions to a set percentage of household income. The calculator returns the maximum contribution towards the premium and the estimated unsubsidized age-adjusted silver plan premium. If the monthly premium is less than the maximum premium contribution, the household will pay the premium without subsidy.The premium caps range from 3.0 percent of income at 133 percent FPL to 9.5 percent of income at 300 through 400 percent FPL. The premium percentage cap will be 2.0 percent for households with income below 133 percent FPL, applicable to legal immigrants who are not eligible for Medicaid. This cap is not shown in the calculator as most individuals with income below 133 percent FPL will be eligible for Medicaid. The calculator uses 2013 FPLs, which will be used by the Exchange during the open enrollment period for the 2014 plan year.
Premiums may vary due to assumptions insurers make in setting premiums or the degree of competition in the market. Premiums will also differ based on regional variations in underlying health costs. Neither of these factors are considered in this estimate. As such, the numbers provided in the calculator are an estimate based on assumptions and should not be used to make financial or legal decisions and are not binding in any way.