The health insurance premium tax credits can make individual health insurance more affordable for many Americans. You are eligible for a tax credit if your earnings fall between certain income limits and you are not offered qualified, affordable coverage through an employer or government program. In this article, we’ll take a look at the health insurance premium tax credit income limits in 2016.
Note - This blog post is based off our new infographic, 7 Truths About The Cost of Health Insurance In America. Check out the full infographic here.
About Health Insurance Premium Tax Credits
As a quick refresher, the health insurance premium tax credits are available for individual or family health insurance policies available on the public Exchanges, also known as the Marketplaces.
The health insurance premium tax credits are "advanced-payable," meaning they can be applied toward your premium at the time you purchase health insurance coverage.
The premium tax credits cap the amount you pay each month for coverage, on a sliding scale based on income.
The tax credits are available to households with income up to 400% of the federal poverty line (FPL). This means households earning up to $47,080 for an individual in 2015, or $97,000 for a family of four, qualify. Here’s a more detailed look at eligibility by household income and family size:
Read more: Premium Tax Credit Charts for 2016
Calculating Your Health Insurance Premium Tax Credit
With a tax credit, your insurance premium is capped on a sliding scale between 2 to 9.6 percent of income, depending on your income.
For example, if you make $23,540 a year in 2015 (200 percent FPL), the maximum amount you will pay for health insurance is 6.34 percent of your income which is $1,492/year ($124/month).
There are several online calculators, like this one, available to help you understand eligibility and to easily calculate savings.
Understanding the income limits for the health insurance premium tax credits can help you understand eligibility for the discounts. For coverage in 2016, the income limits are $47,080 for a single and $97,000 for a family of four.
What questions do you have about the health insurance premium tax credits? Leave a comment or question below.