Obamacare 2018 Subsidy Calculator

Tips to Getting the Largest Subsidy Possible

Saving money on health insurance is easier under the Affordable Care Act thanks to the premium tax credits offered on the marketplace. Also known as subsidies, tax credits help lower your monthly premium while making insurance even more affordable. Most people qualify for some type of assistance under the new law, but it can be tough to take advantage of tax credits when you don’t know where to start. If you’re looking for the best ways to boost your savings under Obamacare, then here are three great tips for maximizing your subsidies.

Report the Right Income

Calculating your income isn’t difficult if you work a job that offers a set salary, but not everyone has this option. For self-employed workers, those who work irregular shifts or those with multiple income sources, reporting income can be a challenge. Before you send your income information into the marketplace, double-check to make sure that you’re submitting the right information.

You might miss out on extra savings or subsidy opportunities by overestimating your income. Even worse, you might owe money back to the IRS come tax time if you underestimate your income and receive a larger subsidy than your income qualifies you for under the law. If anything changes about your income or household size throughout the year, report these changes immediately. Giving the government correct information could save you thousands of dollars in the long run.

Remember Your Dependents

Subsidy awards are based on your income and household size, so don’t forget to count all of the people living under your roof when calculating your family’s numbers. As long as you can claim your children as dependents for tax purposes, you can count them toward your household size, and this includes adult children under the age of 26. Counting all of your dependents ensures that the government has an accurate picture of your household size in relation to your income, and you may qualify for more financial assistance if you have more people to insure.

Check Out the Cost-Sharing Subsidy

The premium tax credit is available for everyone who earns between one and four times the federal poverty level, but there’s another option for those whose incomes fall between 100 and 250 percent of the FPL. If you meet this qualification, then you may be eligible to take advantage of a cost-sharing subsidy, which reduces your out-of-pocket expenses such as deductibles and co-payments. This type of subsidy is only applicable to silver plans, but the savings on out-of-pocket expenses can outweigh what you might have paid for premiums with a bronze plan.

Under Obamacare, there’s a cap on out-of-pocket spending for everyone who enrolls in an ACA-approved health insurance plan. For example, an individual will not have to pay more than $6,600 for medical care in 2015. A typical silver plan will pay for about 70 percent of covered medical expenses. With a cost-sharing subsidy, you get more of those costs covered. Cost-sharing subsidies make silver-level plans comparable to gold plans or higher in some cases. You don’t have to do anything extra to apply for this subsidy. If you qualify, the government will apply the reduction automatically.