Subsidies granted by the Affordable Care Act, also known as the ObamaCare, can help you with saving money on your premium expenses and out-of-pocket costs. These provisions are only available through the Small Business Health Options Program (SHOP) Marketplace. Now, let us take a look at who are eligible for these subsidies and address other important information related to this matter.
By definition, a healthcare subsidy is a form of financial assistance that lowers the cost of your monthly premiums through advanced premium tax credits or cuts your out-of-pocket expenses on things, such as coinsurance, copays, out-of-pocket maximums and deductibles. It is subsidized by the federal government and is paid for via tax.
Who Are Qualified to Apply for the ObamaCare Subsidies
Eligibility for the ObamaCare subsidies is based on income for all legal US residents, but anyone who is receiving affordable, employer-based health coverage, who is qualified for Medicare or who is covered by the Medicaid gap will not be able to receive subsidies. During open enrollment, those who are making below 400 percent of the federal poverty level (FPL) can receive a subsidy in the form of advanced premium tax credits, which lower premium costs, while those who are making below 250 percent of the FPL can receive cost sharing reduction subsidies, which will lower their out-of-pocket expenses. For those who are making below 138 percent of the FPL may be eligible for Medicaid, which subsidizes both cost sharing and premiums, though this is not applicable in all states.
Qualifying for the ObamaCare Cost Assistance Subsidies
If you are a legal US resident aged below 65 years of age and are making between 100 and 400 percent of the FPL, you would qualify for cost assistance as long as you do not have access to affordable employer-based insurance. The best way to know if you are qualified to receive subsidies is simply finding your state’s marketplace or checking HealthCare.Gov to apply for these provisions. This does not lock you into purchasing health insurance, but it will give you useful insights on considering your options. You can also use the subsidy calculator on ehealthinsurance.com to check if you are qualified for cost assistance on the insurance marketplace and learn about the health care options available to you both inside and outside of the SHOP. Take note that while qualified health insurance providers, brokers and agents can assist you in knowing whether you qualify for these subsidies and in signing up for a marketplace plan, you can only avail of these subsidies for plans that are offered on the marketplace of your state.
Getting Marketplace Subsidies and Open Enrollment
You must obtain marketplace subsidies during open enrollment or when there is a case of qualifying life events during a special enrollment period. Prior to open enrollment, you are allowed to apply for cost assistance, but you will not be able to apply for a plan with these subsidies until the yearly open enrollment period.
ObamaCare Subsidies Solution for Insurance Bought Outside the SHOP
Because of technical issues experienced by the official websites of some states, some people who purchased insurance outside the SHOP, despite qualifying for subsidies, had retroactively signed up for marketplace coverage and get federal subsidies. For more useful information about this matter, you can contact your insurer.
Measures to Take If You Do Not Qualify for the ObamaCare Subsides
If you are not eligible to receive the ACA subsidies because of your income status, then you can shop around outside the SHOP Marketplace, aside from looking at the marketplace’s plans. Remember that not all plans that are being offered in your state are on the insurance marketplace and that not all insurance providers participate in it. In different cases, you can find your best option on the SHOP, even without subsidies, and you can also find it outside of it, though you might need the help of reputable agent or broker to help you with this process.
Inability to Afford Health Insurance
If you do not have the financial capacity to purchase health insurance, you may be exempt from the individual mandate that is required by the ACA, which is to buy insurance or pay a fee. You may be qualified for the low-cost or free insurance through subsidies granted by the ObamaCare.
Purchasing SHOP Insurance with an Existing Plan Through Work
You can buy insurance on the SHOP, but you and your family will not be eligible for tax credits and breaks, as well as assistance on up-front costs, unless you are being offered sub-standard insurance by your employer or your existing plan costs more than 9.5 percent of your income. If the coverage provided by your employer does not meet the above-mentioned criteria, then you should be qualified to receive subsidies, but you will need your employer to complete an employer coverage tool form before you can get insured. As for the 9.5 percent cap, it is for employee-only income, which means that the total cost of your employer-based plan can be more than 9.5 percent of your family income.
Getting Subsidies While Eligible for Medicaid
If you are eligible for Medicaid, or if your state did not participate in the Medicaid expansion and you are making below 100 percent of the FPL, then you will not qualify for the health insurance marketplace’s subsidies. This affordability gap is called by many people as the “Medicaid gap”.
Cost Sharing Reduction Subsidies
In order for you to receive cost sharing reduction subsidies or out-of-pocket assistance, you should purchase a Silver plan from the SHOP and have a personal or family income that does not exceed 250 percent of the FPL. This entails that if your family belongs to the lowest income group, you are entitled to pay no more than 6 percent of your share of out-of-pocket costs, while families on the upper level should pay up to 27 percent of such costs. Moreover, families with several children and having low income would get bigger subsidies than most.
One more thing to note is that you are not obliged to pay back Medicaid and cost sharing reduction subsidies, but you may find yourself owing advanced premium tax credits up to your income level’s limit.