Did you sign up for health insurance through the Health Insurance Marketplace? If so, it might be time for a mid-year checkup – of the financial sort.
Beginning this year, if you get your health insurance coverage through the Health Insurance Marketplace, you may be eligible for the premium tax credit. The premium tax credit was put in place to help make purchasing health insurance coverage more affordable for people with moderate incomes.
To qualify for the credit, you have to meet the following criteria:
- You bought health insurance through the Marketplace;
- You are not eligible for coverage through an employer or government plan;
- You are within certain income ranges ($23,550 to $94,200 for a family of 4, see other ranges here);
- You file as anything other than Married Filing Separately (a limited exception applies); and
- You cannot be claimed as a dependent by another person.
If you meet the eligibility criteria, the premium tax credit will be paid directly to your insurance company. The result is that your monthly premiums will be lower.
If any of those eligibility criteria change, it can affect the amount of the credit. If your circumstances have changed, you may need to report those changes to your Marketplace. Some of those changes include:
- increase or decrease in your income;
- marriage or divorce;
- change in family size;
- new coverage through your employer or other reason; or
- changing your residence.
Making necessary adjustments now is important so that the premium tax credit is paid out correctly to your insurance company. If too much money is paid out in tax credits, you may end up owing money or you may get a smaller refund when you file your taxes next year (in order to repay the overage). If too little money is paid out in tax credits, your premiums may be too high. Best to check now to avoid any surprises.
For more information about health care coverage through the Health Insurance Marketplace, check out the government website.
Note that if you are not insured through the Health Insurance Marketplace, the midyear check-up doesn’t apply to you.
