Health insurance is a basic need of everyone, and it is important that we all have it. Fortunately for some people, their employer provides them with access to health insurance. However, for those who are unemployed or their employer doesn’t provide it for them, they can check if they qualify for Medicaid or federal financial help. The federal financial help is often referred to as health insurance subsidy and is set up to provide access to some features enjoyed by those with premium health coverage and out-of-pocket costs insurance plans. By the way, check here to buy car insurance.
Health Insurance Subsidy
Health insurance subsidy is financial assistance that is given to reduce the financial burden of your health insurance coverage. The federal government offers two types of health insurance coverage which are; the Advanced Premium Tax Credit (APTC) and the Cost Sharing Reduction (CSR). Your monthly payment for health insurance is reduced with the advanced Premium Tax Credit, while the out-of-pocket costs paid during your insurance policy period are lowered with the Cost Sharing Reduction. Importantly, once you purchase a health plan, you can as well apply for a subsidy.
What To Expect When Applying For A Subsidy
The whole essence of applying for a subsidy is to get a reduction in the cost of your insurance plan. You must understand how the two premium subsidies you can apply for works before you begin the process. This is because you could end up being eligible for both subsidies, which will help you save more.
If you wish to apply for any of these two premium subsidies, below are the things to expect.
Your Eligibility Will Be Evaluated
Your eligibility is solely dependent on your yearly income compared to the federal poverty level guidelines. Once your household income falls between 100% and 250% of the FPL, you have high eligibility chances for both Advanced Premium Tax Credit (APTC) and Cost-Sharing Reductions (CSR). You will be eligible for only Advanced Premium Tax Credit (APTC) if your household income goes above 250% of the FPL. You will then be required to pay not more than 8.5% of your annual income.
Since most approved health insurance plan comes in four main categories— Platinum, Gold, Silver, and Bronze categories. These categories determine the percentage you get to pay. Advanced Premium Tax Credit (APTC) is available in the four metal plan, while the silver plan is the only plan the Cost-Sharing Reductions (CSR) is available in.
The Advanced Premium Tax Credit is given based on your income and household size, and it is aimed at helping you reduce your monthly premiums. It is also influenced by the state’s average health coverage cost. Once all these are evaluated, and you qualify for this subsidy, you can go ahead to apply.
Cost-Sharing Reductions, on the other hand, help reduce your out-of-pocket costs. These extra savings reduce your deductible, out-of-pocket maximum, and coinsurance or copays. Once you’ve ascertained that your income qualifies you for this class of subsidy, you have to enroll in a plan to get it. The plan you enroll for must be in the Silver category to qualify for it.
Federal Poverty Level Will be Compared To Your Income
The main factor that determines whether you qualify for a health insurance subsidy or not is your income. For example, an individual who makes up to $52,000, which is about four times the Federal Poverty Level ($12,880), automatically qualifies for a health insurance subsidy. For a family of four, if you earn about $97,000, you may also qualify. To qualify for both subsidies, you should be earning about $29,000 for an individual or about $60,000 for a family of four.
The Early Bird Gets the Premium Subsidy
As of now, every eligible person has access to both cost-sharing reductions and substantial premium subsidies when receiving unemployment compensation. However, you have to enroll early to stand a higher chance of getting your subsidies on time. If you also choose to change your plan, you must also act early. The earlier you fill out those forms, the better your chances of receiving credit for your subsidies.
Your Subsidies Is Affected By Your State’s Marketplace
Before applying for a subsidy, it is important that you know how your state’s insurance marketplace functions. This is because your state’s insurance marketplace policies will surely affect your subsidies. The marketplace used by different states differ, and these marketplaces have their procedures. How fast you get your subsidies is awarded is mostly dependent on the efficiency of the people running the marketplace and the processes employed by these state marketplaces.
