Tax credits for individual health insurance

Tax credits are available for individuals and families who meet certain income requirements and do not have access to affordable health insurance through their employer or another government program.

Eligibility for tax credits is based on a standard, called the “federal poverty level,” that looks at the family income and the number of people in the family. The size of the tax credit is based on a sliding scale, with those who make less money getting a larger financial support to lower the cost of their insurance coverage.

Individuals and families who make between 138 percent and 400 percent of the federal poverty level may be eligible for a tax credit. This means that an individual making up to $44,680 and a family of four earning up to $92,200 may be eligible for a tax credit.

Tax credits lower the cost of your premium. Tax credits reduce the amount of the premium you will pay for insurance

Tax credits help low- and middle-income individuals and families. Tax credits are available to individuals and families who meet certain income requirements.

Tax credits can be used when you enroll. Tax credits can be applied to the cost of your health plan when you enroll – you do not need to wait until you file a tax return at the end of the year.

Tax credits are only available through Covered California. You must enroll in a health plan through Covered California if you want to use your tax credits.

Tax credits are paid directly to your health plan. These tax credits are paid by Covered California to your health plan to keep your costs low.

Tax credits will be adjusted at the end of the year based on your actual income. At the end of the year, the tax credits may be adjusted if your income is different than you anticipated. This means that you will want to notify Covered California if your income changes.

The amount of the tax credit depends on household income and family size of eligible individuals. Below are some examples of potential costs to families in California. Covered California will make available the exact premium and plan choices so you can know exactly what your insurance will cost.

Household Size Annual Income Yearly Cost of Health Insurance (without government subsidy) Yearly Federal Government Subsidy New, Lower Cost of Health Insurance
4 $31,900 $12,300 $11,100 $1,200 ($100 per month)
4 $88,800 $12,300 $3,900 $8,400 ($700 per month)
1 $27,000 $4,548 $2,460 $2,100 ($175 per month)

The tax credits are available when you buy insurance so you do not have to pay all of the premium costs up front and wait for reimbursement. The tax credits will be available to all people who are eligible for them, whether they file taxes or not.

The credits are only available for health insurance purchased through Covered California and will be paid directly to your private health plan by Covered California..

Can I get health insurance if I have a pre-existing condition?

Starting in 2014, insurance companies will be required to sell policies to everyone regardless of current or past health issues, and they will be prohibited from using your health status to determine how much your health insurance will cost. You can purchase health insurance regardless of any current or past health conditions, and insurance companies cannot charge you a different premium.

This requirement means whether you buy insurance through Covered California or somewhere else, you cannot be denied coverage or even screened based on a pre-existing medical condition. It is important to remember that this requirement only applies during the open-enrollment periods. .

Do I have to buy health insurance?

Starting in January 2014 most people will be required to have health insurance or pay a penalty.

Health insurance can be provided by your employer, bought on your own, through Medicare or Medi-Cal.

The penalty in 2014 is 1% of your income or $95 (whichever is greater).

The penalty in 2015 increases to 2% of your income or $325 (whichever is greater).

In 2016, the penalty increases to 2.5% of your income or $695 (whichever is greater).

This penalty will be paid with your taxes at the end of the year. The penalty can not be more than national average of the annual premium for a bronze level plan sold through health insurance exchanges.

You’ll get proof of your health insurance coverage from your plan.

You do not have to pay a penalty if you fall into the following groups:

  • People who would have to pay more than 8 percent of their income for health insurance
  • People with incomes below the threshold required for filing taxes (in 2012, $9,750 for a single person and $27,100 for a married couple with two children)
  • People who qualify for religious exemptions
  • Undocumented immigrants
  • People who are incarcerated
  • Members of Native American tribes
  • If you do not have insurance and do not fit into one of these categories, then you will likely pay a penalty..

    Do I have to provide health insurance for my employees?

    If you have fewer than 50 full time equivalent employees you are not required to buy health insurance for your employees. The Affordable Care Act (the new health care law) does not impose any penalties on small businesses that do not provide health plans.

    Even though you are not required by law to provide health insurance, there are still many good reasons to do so. Providing health benefits helps retain good employees and recruit the best talent. Providing coverage also helps small health problems from turning into big problems. Preventing illness helps keep people at work, reducing absenteeism and increases productivity.

    Why should I buy health insurance?

    At some point in our lives we all need to use the health care system. You never know when you you might have an accident or you or your family member gets sick. Without health insurance that uninsured visit to the doctor or hospital could mean financial disaster.

    Starting in 2014 health insurance will be easier to purchase, available to everyone regardless of pre-existing conditions and more affordable with new government subsidies. These are some of the positive benefits of Health Care Reform / The Affordable Care Act / ObamaCare. It no longer makes sense not to buy a health plan.

    An affordable health plan means peace of mind for you and your family. Buying health insurance also helps the entire community because we all end up paying the costs of providing care to the uninsured..