Frequently Asked Questions about Subsidies
What is a subsidy?
There are two different kinds of subsidies. The first is a tax subsidy or Advance Premium Tax Credit which reduces the amount you spend on your monthly premium. The second is a cost-sharing subsidy. This lowers your out-of-pocket costs, including copays, coinsurance, and goes towards your out-of-pocket maximum.
How do I receive the subsidy?
You can get the subsidy in two different ways. The first is to immediately reduce your premium amount and the government pays the insurance company to subsidy amount. The other way is to pay the full monthly premium then get credited the amount on your tax return at the end of the tax year.
How do I qualify for a subsidy?
Tax subsidies are based on the total household income. If the household makes less than 400 percent of the federal poverty level, you qualify for a tax subsidy. If you make less than 250 percent of the federal poverty level, you qualify for a cost-sharing subsidy as well. To learn about federal poverty guidelines, see them here (link). If you qualify for a cost-sharing subsidy, you must buy a silver level plan to receive this subsidy.
If my employer offers coverage for my dependents but that coverage is more expensive for my dependents than it is for me, can my dependents get a subsidy and coverage from the public Marketplace?
No, as long as the coverage from the employer is affordable, that is costs 9.5 percent or less than your earned wages. They are able to purchase individual coverage but cannot receive subsidies.
If my employer does not offer coverage for my spouse, will my spouse be able to receive a subsidy?
Yes, he or she is able to shop on the marketplace as long as he or she does not have access to affordable health insurance from your or his or her employer. The spouse is also able to receive a subsidy if he or she qualifies.