The federal government will start offering subsidies for individuals to purchase insurance on the federally run exchanges starting on January 1, 2018.
The move is a welcome one for the millions of Americans who have struggled to get coverage through the ACA’s marketplaces, which have been plagued by glitches and poor performance by insurers.
But it comes with a caveat: The subsidies will only be available for individuals who are at least 50% of the poverty level.
The subsidy program will cost $6,400 per family, or $1,000 per adult for a single individual.
Families with children under age 26 will also be eligible for subsidies, but they’ll have to pay an additional $1 for each child.
The program is a way to help more people afford health insurance through the marketplace, while also helping families and individuals who have trouble paying premiums.
But it’s also a way for the federal government to make sure that the vast majority of Americans have access to affordable insurance.
Here’s what you need to know about the federal subsidies.
How much do I qualify?
For a family of four, a household of three will qualify for a maximum subsidy of $2,600.
For a household with two children, that will increase to $3,600 per family.
For an adult, the maximum subsidy is $6.50 per family for the first year.
If a family has three children, the subsidy will go up to $7,500.
For more information, see the HealthCare.gov FAQ.
Will my subsidy be paid by a credit card?
No, the subsidies will be paid with cash.
There is a limit to how much the federal program can be paid out in one payment, which is $1.7 billion.
If you’re eligible, you’ll need to use the same form of payment that you use for taxes and fees, including a credit or debit card.
The government will require you to fill out a form, called an application, for the subsidy.
The application must be submitted by July 31.
Once submitted, the government will begin processing your application.
You’ll also have to show the government your income and income-eligible expenses.
You’ll need this information to apply for the subsidies.
For details on the subsidy program, see our previous coverage on how to get insurance on HealthCare, which starts on January 31.
What if I don’t qualify for subsidies?
If you don’t meet the income threshold, you won’t qualify to receive the subsidy, according to the program’s website.
But you may still qualify for the tax credits if you earn less than 400% of poverty.
You also may be eligible to receive some tax credits.
For details, see Marketplace FAQs for those who are eligible.
What happens if I’m eligible for both subsidies and the tax credit?
If your household qualifies for both the tax and subsidy, the federal subsidy will be $1 per household, regardless of income.
The tax credit will be reduced by 50% if your household is at or below 200% of household income.
However, if your income exceeds 200% and your household meets the eligibility requirements, you can receive the full amount of the tax subsidy.
You can’t use the full tax subsidy if you qualify for only the subsidy on the tax form.
For an example of a household that qualifies for the two-part subsidies, click here.
What are the eligibility criteria?
To be eligible, a person must:Be 65 years of age or older at the time of enrollment on Health.gov and have income of $40,000 or more per yearIf you have health insurance that covers you for less than $400 per month, you will not be eligible.
If your income is less than the federal poverty level, you’re not eligible.
A household member or person with disabilities is eligible if:They have income at or less than 200% poverty levelYou qualify for both tax credits and the subsidyIf your family qualifies for tax credits, your family will be able to claim the full $1 subsidy for the entire year.
For example, if you and your partner have an income of less than 100% of your household income, your partner may qualify for more than the full subsidy.
If, however, your income reaches 200% or more of household level, the individual will not qualify for either the tax or subsidy.
For example, a family member or an individual with disabilities who qualifies for one part of the subsidy may not qualify in the other part of that subsidy.
How can I apply for subsidies in the past?
If the family meets the income eligibility requirements in the previous step, you may be able the tax payments by mail.
To get the payment, you must mail the application form to your local U.S. Postal Service office.
The application must include:The name and address of the applicant.
A list of all of your family members, including your spouse, children, and parent.
The address of your health insurance plan, including the city and state of residence, the city where you