Health Blog 2
What is the Health Premium Tax Credit Offered Through Covered California?
In a nutshell, the health premium tax credit is premium assistance (aka government subsidy) offered only through Covered California to help you purchase an affordable private health plan if you don't have access to other coverage (ie. employer plan, Medicare, VA Benefits, Medi-Cal). Eligibility for the tax credit is based on your household income and family size for 2014. If your annual income for 2014 is projected to be under these amounts, you may qualify:
· 1 person -- $45,960
· 2 person -- $62,040
· 3 person -- $78,120
· 4 person -- $94,200
· 5 person -- $110,280
· 6 person -- $126,360
There are three ways to apply the tax credit:
1. Take it now: Pay less monthly premium (aka the advance premium tax credit)
2. Take it later: Pay full monthly premium (get a refund when filing 2014 taxes)
3. Take it partial: Split the difference monthly premium (if income/family fluctuate)
Most will choose the advance premium tax credit in order to keep the monthly cost affordable, but some households with unknown income for 2014 may choose to be more conservative and either "take it later" or "take it partial."
For example, you have a monthly premium of $1,000 and qualify for $700 per month in advance tax credits, each month, the federal government will pay $700 directly to the private insurance company, and your monthly premium payment to the insurance company would be $300.
Garrett Viggers is a Northstate employee benefits specialist (Viggers Benefits) and Affordable Care Act (ACA) & Health Insurance Marketplace consultant. He has spent 11 years in the industry as a broker for large and small employers. He helped launch pioneer CDH company Veritas Health Systems (HRAs / HSAs) in 2002 and the spin-off technology company, Inovius, in 2006.
Most recently, in July 2013, Garrett founded Windfall App Technologies with the launch of the first-to-market, Health Insurance Marketplace cross-platform Affordable Health App to find affordable coverage with a health premium tax credit in the Marketplace (Covered California). Windfall App Technologies is a team of ACA insurance experts and technology (App & Web) experts committed to providing relevant solutions in the new world of ACA and Health Insurance Marketplace Exchanges.