Cost Sharing

Cost Sharing Subsidy

The cost sharing subsidy can lower your out-of-pocket expenses (deductible and co-insurance) based on your income.  If your household income is less than 250% of the federal poverty level ($28,725 for individuals, $58,875 for a family of four, shown in blue in the chart below) you may qualify for the cost sharing subsidy if you don't have access to affordable insurance through your employer.

Advanced Premium Tax Credit (APTC)

The APTC is a new kind of tax credit that can save you money by lowering your monthly premium payments based on your income.  If your household income is less than 400 percent of the federal poverty level ($45,960 for individuals, $94,200 for family of four, both blue and yellow sections in the chart below) and you don't have access to affordable insurance through your employer you can qualify.

The Federal Poverty Level (2013)

Percent Of The National Poverty Level
Household Size 100% 133% 150% 200% 250% 300% 400%
1 $11,490 15,282 17,235 22,980 28,725 34,470 45,960
2 15,510 20,628 23,265 31,020 38,775 46,530 62,040
3 19,530 25,975 29,295 39,060 48,825 58,590 78,120
4 23,550 31,322 35,325 47,100 58,875 70,650 94,200
5 27,570 36,668 41,355 55,140 68,925 82,710 110,280
6 31,590 42,015 47,385 63,180 78,975 94,770 126,360
7 35,610 47,361 53,415 71,200 89,025 106,830 142,440
8 39,630 52,708 59,445 79,260 99,075 118,890 158,520
For each additional
person, add
4,020 5,347 6,030 8,040 10,050 12,060 16,080
Maximum Premium as
a percent of income
2.0% 3.0% 4.0% 6.3% 8.1% 9.5% 9.5%

Cost Subsidy Calculator

How do the Advanced Premium Tax Credit or Premium Subsidies work?

If your household income is between 100% and 400% of the federal poverty level (see table above, blue and yellow areas together), you likely qualify for a Tax Credit (also called a premium subsidy) to help offset the cost of buying an individual health insurance policy.  The amount depends on your family size and how much money your family earns. The lower your income, the higher your subsidy will be.

To determine the amount of subsidy you may be eligible for you'll need to estimate your household income for 2014.  For most people, you can use your household's adjusted gross income for this estimate. If you know your 2013 adjusted gross income, use that and take into account any changes you expect in 2014. When you apply for coverage, a number called "modified adjusted gross income" (MAGI) will be used.  Modified adjusted gross income is generally your household's adjusted gross income plus any tax-exempt Social Security, interest, and foreign income you have.

The subsidy is paid by the federal government directly to the insurance carrier. The premium you pay each month to the insurance carrier is the subsidized premium. You do NOT need to pay the full premium and be reimbursed later.

So what happens if you get a subsidy payment in advance and then your spouse suddenly finds a job, boosting your family's income? You'll need to go through a reconciliation process and pay back some of the subsidy. However, most households will need to repay only a portion of the overestimated subsidy. The amount you have to pay back will be based on how much you earn.

How do Cost Sharing Subisdies work?

Health insurance companies offering coverage through the Marketplace must lower the amount you pay out of pocket for essential health benefits if your household income is below 250% of the Federal Poverty level (see table above, blue area).  This includes help paying costs like deductibles, coinsurance and copayments.  These added benefits must be adjudicated directely by the insurance carriers meaning there is no need for any seperate claim filings with the Insurance compaines to receive these increased benefits once you are approved.  The subsidy is sent from the federal government directly to the insurance compay behind the scenes and then is passed on directly to you in the form of lower your out of pocket costs making it a very simple process for consumers.

When you apply for coverage in the Marketplace you'll learn if you're eligible for these out-of-pocket costs savings.  Be aware however that you must choose a Silver plan to get the savings.  One of our trained staff can help you with this process.