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No matter your income, paying for health insurance shouldn’t be impossible. The Affordable Care Act helps provide insurance to people in lower- to middle-income households.

What Are They?

ACA subsidies are a type of tax credit. Depending on your annual income, subsidies reduce how much you pay in monthly premiums for insurance and will be taken into consideration during tax season.

In addition, ACA subsidies are typically locked-in and increase or decrease in sync with premiums, protecting them from inflating too high. 

How Do They Work?

You will estimate how much money you think you will make for the year. After filing these estimations, you will agree on a portion to pay for your premiums. The government will then pay out the rest in a subsidy each time you pay for insurance. Simply pay your share of your premiums, and the government takes care of the rest.

Subsidy plans come in two varieties.

  1. You can choose an advanced credit, where your monthly bills will be reduced.
  2. Or, you can pay your premiums as normal and receive a tax credit for the subsidies you were promised with your tax returns.

How Can You Apply?

Your income and number of dependents determine your eligibility and how high your subsidies will be. You can find your subsidy amount here:

If you qualify, you must apply for subsidies. Note that applications can only be submitted through a government-sponsored insurance marketplace. As your Health Insurance Guide, we’ll submit that for you.

Other Things to Keep in Mind

If you earn more money than you estimated, you may be required to pay for some or all of the subsidies you were granted for the year.

If you earn less than you estimated, you may be given additional money, which you will see reflected in your taxes for the year when you file.

Note that through the ACA, a child/dependent will receive health care as a gift, even if they are not eligible for a child tax credit on your taxes.

Bottom Line

No matter your situation, health insurance coverage is available to you. Let’s discover what subsidies you qualify for and optimize your healthcare today!