When you fill out your Marketplace application, you will find out if you can get financial help and how much you can save. There are 2 main types of financial help for Marketplace plans: Premium tax credits and cost-sharing reductions.
What is a premium tax credit?
A premium tax credit is money the government pays to help cover monthly premium payments for people who qualify. Premium tax credits help make health care more affordable by lowering the cost you pay for your health insurance plan each month, which is called your premium.
Do I qualify for a premium tax credit?
If you use the Marketplace, you may be able to get a premium tax credit based on your yearly income. The amount of your tax credit depends on how much money you make and how many people are in your family. In general, the less money you make, the larger your tax credit will be. This amount can go up or down based on changes in your job status, size of your family, or marital status.
There are two ways to use the tax credit to lower your premiums:
- Take it now: If you take your tax credit now (in advance), the government will pay a part of your credit amount toward your premium each month. The government will directly pay to your insurance plan. When you file your taxes, you will report that you already used your tax credit.
- Take it later: If you choose this option, you will pay your full premium each month. When you file your taxes, you will subtract your premium tax credit from any taxes you owe. If you do not owe taxes, you will get a bigger refund.
What is a cost-sharing reduction?
A cost-sharing reduction – sometimes called a subsidy – is money the government pays to help cover out-of-pocket health care costs for people who qualify. Cost-sharing reductions help make health care more affordable by lowering the amount of money you pay out of your own pocket each time you get medical services.
Do I qualify for cost-sharing reductions?
If you use the Marketplace and enroll in a Marketplace Silver Plan, you may be able to get cost-sharing reductions based on your yearly income.
Click here to visit healthcare.gov and see if you can get help paying for health insurance.