Most Americans must now carry health insurance or face a tax penalty when filing their 2014 tax return in 2015. Health insurance can be expensive, but if you’re eligible to shop in the Health Insurance Marketplace, you can apply for financial assistance from the government to help cover monthly premiums and out-of-pocket expenses.
The Affordable Care Act created health insurance discount options, depending on your household income and family size.
Help with premium payments
The premium tax credit or subsidy lowers your monthly premium payments. The federal government can pay part of the premium to your insurance company or you can claim the full amount of the premium tax credit when filing your tax return.
To qualify, your income must meet federal guidelines (up to $46,680 for individuals and $95,400 for a family of four, for example).
If you’re married, you must file a joint tax return to qualify for a premium tax credit.
One caveat: Premium tax credits are tied to the cost of the second lowest sliver plan. (Marketplace plans are grouped in four categories: bronze, silver, gold and platinum.) You can buy a plan from any category, but your tax credit will remain the same.
Help with out-of-pocket expenses
Another discount lowers your out-of-pocket expenses to cover deductibles, coinsurance and co-payments – but you must choose a silver-tiered plan.
To qualify, your income must meet federal guidelines (up to $29,175 for individuals and $59,625 for a family of four, for example).
People who receive help with out-of-pocket expenses can also get a premium tax credit.
Have more questions about health insurance discounts and the Affordable Care Act? TurboTax has you covered. You can get your questions answered at TurboTax Health.