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Do I Qualify for Financial Help on My Health Insurance?

Health insurance can be expensive, we all know that. So what happens when you or your family don’t make a large enough income to purchase ample health care coverage? What if your employer doesn’t offer health care, where else can you find it?

The good news is, it is possible to receive financial aid for health care. This financial assistance is called a subsidy or premium tax credit. There are multiple qualifying factors needed in order to receive this assistance, but if you do qualify, this subsidy can be very helpful financially.

What is a health insurance subsidy?

A subsidy (or premium assistance tax credit) is applied to your monthly insurance premiums and helps pay for your health insurance. Keep in mind that this subsidy only applies when you purchase your health insurance through the “health insurance marketplace.” Learn more about the health insurance marketplace here.  You can also choose to take the assistance as a tax credit when you file your 2016 taxes in 2017.

Am I eligible for a subsidy to help pay for my health insurance?

Like I mentioned before, if you buy your health insurance through the  health insurance marketplace, then you can apply for a subsidy–financial assistance to help you pay for your health insurance. Whether you are eligible for a subsidy or not is generally determined by your household income and family size. For example, the lower your income, the larger your tax credit.


Here are a few other factors that determine whether or not you are eligible for health insurance:

  • You are legally and lawfully living in the United States and are not currently in jail or incarcerated.
  • Your employer does not provide affordable health insurance that covers your basic needs, or through Medicaid, Medicare, etc.
  • If you are a legal immigrant and are not eligible for Medicaid, you can receive financial assistance if your family makes lower than a specific income.


Will my income qualify as low income?  

Whether or not your income qualifies as “low income” depends on if you meet the federal poverty guidelines and your household size. For instance, if your household income is less than 400 percent of the federal poverty level, then you may qualify for a subsidy. You can visit this website and answer these 7 questions to see if you qualify for a subsidy.

How much you save on healthcare will be based on your projected income for the upcoming year, but you will need to use your income from the previous year’s tax return to estimate your projected income. To make it even easier, you can use’s quick form to determine what savings you can receive.


How much money will I receive?

The amount of financial assistance you receive is determined by your household income in comparison to the poverty level. First, it is determined how much you should be contributing to pay for your health insurance and the amount of money you will need to receive in order to meet that mark.


You can receive your subsidy in one of three ways:

  1. If you choose to get the premium tax credit or subsidy in advance, the government  will send the money directly to your health insurance company. This will be credited towards your cost of health insurance and will decrease how much you owe each month.
  2. If you do not choose to have your subsidy help pay for your health insurance, you can receive it as a tax credit the following year.
  3. You can also choose to receive some tax money right away, and some when you file for taxes.


Let’s be honest, if you qualify for subsidy there’s a very good chance you will take every penny coming your way upfront.


What happens if I don’t buy health insurance?

If you don’t buy health insurance you can be fined for 2.5% of your household income or for the total amount of time that you have not had health insurance. These fines increase each year. In 2016, the penalty for not having qualifying health plan resulted in a fine of $695 per adult and $347.50 per child. If health insurance seems unaffordable, carefully examine the different types of financial assistance offered. There are a lot of ways to ensure you have enough health insurance, at an affordable rate.