How Do I Qualify For Obamacare Tax Credits?

Many American citizens are asking if they are really going to qualify for Obama’s healthcare and if they do, at what price tag.  There are many charts and eligibility calculators online that show the maximum incomes per household that are possible with this new health plan.

Should you fall into the income level, earning no more than four times the federal poverty level, and then you will quality for Affordable Care Act’s health care credits.  This will include approximately 28.6 million Americans.

Here’s an example: if you are single and are not making more than $45,960 in 2014, you qualify!  If you are a family of 3, you should not make more than $78.102 or you will be nixed!  For more information on tax credit calculators, read more>

So, How Does This Work?

Obamacare calls these tax credits; however, they are really government funded subsidies.  You will not owe income taxes in order to receive credits.  It’s paid directly to your insurance company when you enroll.  You won’t have to wait for your taxes to be filed to receive your credit and you won’t pay the full premium if you purchase health insurance and wait to be reimbursed.

Let’s look at credits and what they mean and how much is the credit? Everything revolves around your income and the size of your household.  Those with the lowest level of income will receive the highest payout or tax credits.

If you happen to be 40 years of age and single and earn $35,000 you would qualify for an annual credit of $532.  If you are 40, have 2 children and make $75,000 you will receive $4,422 credit.  It seems the older you are, the larger your credit will be, because your health insurance costs will be higher.

Therefore, if you are 60 years old and making $35,000, you will qualify for $4,866 credit which is far greater than that same single person who is 40, but your health insurance costs will be higher.

What if I Already Have Insurance?

What if you already have health coverage through your place of employment or through your spouse’s insurance?  You will not need or quality for health insurance credits, with two exceptions:

  • Your employer’s health coverage is less than 60% of your benefits or the costs.
  • Your share of your employer’s premium, which you must pay out of your pocket, is over 9.5% of your income.

Should either one of these exceptions apply, you can enroll in a plan within your state health insurance and also become eligible for premium and cost sharing subsidies.

Businesses as well as individuals are able to purchase health insurance through their state online health insurance.

Current Status

Each state has its own exchange, either state run or federally run exchanges.  As we all know, the federally run exchanges have had website issues and have prevented many Americans from signing up so far.  The October 1, 2013 deadline has come and gone and the new projected time is end of November, 2013.  New health care coverage is supposed to start on January 1, 2014.  With the website problems, the government may extend enrollment beyond the March, 2014 deadline.  In the meantime, you may read up on or check online for further information on qualifications, costs and exceptions.

There are also many online insurance sites that have been doing business for many years that do not have the same technical, website issues as the federal insurance website has.  These sites can give you a free quote to use as a comparison with the state exchange premiums.  The premiums may be less expensive but they cannot offer tax credits. This will be very important if you do not qualify for tax credits due to too high of an income or if the tax credit is minimal.

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