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Small Business Employee Benefits and HR Blog

Premium Tax Credit Charts - 2015

As part of the Affordable Care Act (ACA), premium tax credits are available to help individuals and families purchase individual health insurance through the Health Insurance Marketplaces. The following premium tax credit charts show eligibility and the amount of the tax credits, updated for 2015. 

What are the Premium Tax Credits?

The federal government provides discounts for health insurance to eligible individuals and families. The discounts, called premium tax credits, help many people buy more affordable individual or family health insurance coverage through the new state Health Insurance Marketplaces.

The health insurance tax credits are "advanced-payable" meaning they can be applied toward premiums at the time of purchase.

Individuals and families are eligible for a premium tax credit if they meet certain income requirements (see chart below) and do not have access to affordable health insurance through an employer or government program such as Medicaid or Medicare.

Tip:  The premium tax credits provide significant savings. In 2014, 87% of people who purchased a health plan through the Marketplace received a discount, paying only $82/month on average.

Premium Tax Credit Chart - Eligibility

The tax credits are available to households with income up to 400% of the federal poverty line (FPL). As the chart shows, households qualify who earn up to $46,680 for an individual in 2014, or $95,400 for a family of four.

When the premium tax credit is applied, the insurance premium is capped on a sliding scale between 2% and 9.6% of income, depending on income.

For example, if an individual makes $23,340 a year in 2014 (200% FPL), the maximum amount the individual will pay for health insurance is 6.34% of income which is $1,480/year ($123/month).

tax_credit_eligibility

Note: The percentage caps were updated slightly for 2015 in Rev. Proc. 2014-37. The charts in this article reflects these updated percentages for 2015.

Premium Tax Credit Chart - Examples

The following chart provides examples of premium tax credits. 

premium_tax_credit_example

Tip: There are several online calculators available to calculate specific premium tax credit amounts, like this one.

What questions do you have about premium tax credits or the Affordable Care Act in 2015? Leave a comment. We'll help answer.

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