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Individual Subsidy

It is estimated that over 40% of people applying for coverage through the exchanges will qualify for a subsidy. Subsidies will be provided for individuals and families based on their Modified Adjusted Gross Income (MAGI). For those falling between 138% and 400% of the Federal Poverty Level, premium tax credits and cost sharing assistance will be provided according to the price of the Silver Plan in that area. These will only be provided within the health insurance exchanges, as those purchasing plans outside of the exchange will forgo any financial assistance. Subsidies will place premium limits for consumers based on their MAGI.

Examples of premium limits:

  • Up to 133% of the Federal Poverty Level (FPL) cannot exceed 2% of income
  • 133% to 150% of the FPL cannot exceed more than 3 – 4% of income
  • 150% to 200% of the FPL cannot exceed more than 4 – 6.3% of income
  • 200% to 250% of the FPL cannot exceed more than 6.3 – 8.05% of income
  • 250% to 400% of the FPL cannot exceed more than 8.05 – 9.5% of income

Federal Poverty Level Guidelines for 2013 can be found here

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While the subsidy itself is a tax credit, consumers have a choice in how they would like to apply it to their health insurance premium. In one option, the credit is calculated when the policy is purchased. This credit is then sent directly to the insurer, while the consumer pays the remaining total. The upfront payment is easier to manage for many, but does come at a price. If, for example, an individual applies for the upfront payment option but incorrectly calculates their projected income, there will be a repayment penalty. The second option is to apply for the credit when taxes are filed. This option does require that the full premium is paid out of the consumer’s pocket, but they receive a tax credit and refund (if applicable) once they file their annual taxes.

It is hoped that by offering assistance with premiums and cost sharing, enrollment in the health insurance exchange will be more prevalent. It is also anticipated that subsidies will assist in getting younger and healthier individuals into the mix. Let Health Exchange Quote Insurance Agency assist you with finding the best plan, and applying for your premium subsidy today!

Estimate your subsidy via the calculator!

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30101 Town Center Drive, Suite 109
Laguna Niguel, CA 92677

Telephone: (800) 366 2751


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