How does the individual subsidy for the purchase of Health Insurnance work and who qualifies.

Subsidies: Who is eligible and how do they work?

June 5, 2013
Starting January 1, 2014, some of your individual clients may be able to get subsidies or tax credits when they buy health coverage. So who can get these subsidies or tax credits, and how do they work? We’ll break it down for you.
Subsidies for individuals
In 2014, people who qualify may be able to get a tax credit from the government to help them buy health coverage and pay their premiums. Or they may qualify for subsidies from the government to help them pay for their out-of-pocket health care costs. And they don’t have to wait until tax time to get it. The tax credit can be used for any individual plan sold on the exchange, or health care marketplace.
Who qualifies

• Tax credit:
  • People who are U.S. citizens or legally live in the U.S.
  • People earning between 100% and 400% of the federal poverty level if they are not eligible for other sources of minimum essential coverage, including government-sponsored programs such as Medicare and Medicaid or Medi-Cal in California.
  • Single people with household modified adjusted gross incomes from 100% to 400% of the federal poverty level would earn from $11,490 to $45,960 each year.
  • A family of four with household modified adjusted gross income from 100% to 400% of the federal poverty level would earn from $23,550 to $94,200 each year.
• Subsidy:
  • People with incomes up to 250% of the federal poverty level may also get an extra subsidy when they buy a silver level plan. These subsidies are lower cost shares for services covered by the silver plan. The federal government subsidizes the higher benefits provided by the insurer.

Who doesn’t qualify

• People who can get Medicare or Medicaid (Medi-Cal in California)
• People who can get a plan of a minimum value at work with premiums that cost less than 9.5% of their earnings