Premium Tax Credit and Subsidies
After you fill out an application with the Health Insurance Marketplace and provide household and income information, you’ll find out if you qualify for a Premium Tax Credit (PTC) that lowers your monthly health insurance bill.
You’ll also find out if your income qualifies you for extra savings known as cost-sharing reductions (CSRs). If it does, you can also save money by paying less out-of-pocket each time you get medical services.
You can qualify for the PTC and CSRs at the same time. Note, if you take funding from your previous employer or benefits provider, you can't qualify for the PTC or CSRs. Read Employer Funding (HRA) Versus Premium Tax Credit to learn more.
Note: Via Benefits doesn't create these rules. They are dictated by Centers for Medicare and Medicaid Services (CMS) and the Health Insurance Marketplace.
Premium Tax Credit
A PTC can be used to lower your monthly insurance premium when you enroll in a plan through the Health Insurance Marketplace. Your tax credit is based on the income estimate and household information you put on your Marketplace application.
Federal Poverty Levels (FPLs) & Premium Tax Credit Eligibility
Income Between 100% and 400% FPL
If your income is in this range, you qualify for a PTC that lowers your monthly premium for a Marketplace health insurance plan in all states.
Note: If your income is at or below 150% FPL, you may qualify to enroll in or change marketplace coverage through a Special Enrollment Period.
Income above 400% FPL
If your income is above 400% FPL, you may now qualify for a PTC that lowers your monthly premium for a Marketplace health insurance plan.
You can use all, some, or none of your PTC in advance to lower your monthly premium.
If you use more advance payments of the tax credit than you qualify for based on your final yearly income, you must repay the difference when you file your federal income tax return.
If you use less premium tax credit than you qualify for, you’ll get the difference as a refundable credit when you file your taxes.
You can buy health insurance through sources other than the Health Insurance Marketplace, but the only way to get a premium tax credit is through the Health Insurance Marketplace.
Source: https://www.healthcare.gov/glossary/premium-tax-credit/
Cost-Sharing Reductions
Cost-sharing reductions are a discount that lowers the amount you have to pay for deductibles, copays, and coinsurance. In the Health Insurance Marketplace, cost-sharing reductions are often called “extra savings.” If you qualify, you must enroll in a Silver category plan to get the extra savings.
When you fill out a Marketplace application, you’ll find out if you qualify for the premium tax credit and extra savings. You can use a
premium tax credit for a plan in any metal category. But if you qualify for extra savings too, you’ll get those savings only if you pick a Silver plan.If you qualify for cost-sharing reductions, you also have a lower out-of-pocket maximum — the total amount you’d have to pay for covered medical services per year. When you reach your out-of-pocket maximum, your insurance plan covers 100% of all covered services.
If you're a member of a federally recognized tribe or an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder, you may qualify for additional cost-sharing reductions.
Source: https://www.healthcare.gov/lower-costs/save-on-out-of-pocket-costs/
Qualifying for Cost-Sharing Reductions
Cost-sharing reductions are available to those whose income falls between 100% and 250% of the FPL. In states with expanded Medicaid programs, this range is between 138% percent and 250%.
| Household Size | 100% of 2024 FPL | 138% of 2024 FPL | 250% of 2024 FPL |
| Individual | $15,060 | $20,783 | $37,650 |
| Family of 2 | $20,440 | $28,207 | $51,100 |
| Family of 4 | $31,200 | $43,056 | $78,000 |
*For those living in Alaska and Hawaii, see your federal poverty guidelines.