This article was last updated on Jan. 9, 2023.
We get it. There’s a lot to know about health insurance. It’s a highly regulated industry with lots of rules, choices and costs. And since we take pride in serving our members, we want to be there to help you figure it all out and feel confident in the choices you make when it comes to your health care and budget.
You might have heard in the news lately that more Americans qualify for health insurance subsidies External Site than before. When the American Rescue Plan Act was passed in March of 2021, it expanded health care subsidy eligibility for people who buy their health insurance through the Health Insurance Marketplace® (also referred to as the exchange or Healthcare.gov External Site). That means if you do not receive health insurance through your employer, and you purchase your own individual or family plan, you might be able to save money on your monthly premiums. You still probably have some questions, and we’re here to answer those.
Let’s start with some basics.
What’s a health plan subsidy?
A health care subsidy helps you pay for a good or service External Site, usually provided by a government entity, that you do not need to pay back. In this case, there are two health insurance subsidy options available through the federal government to help qualifying individuals with health insurance costs.
- The Advanced Premium Tax Credit External Site lowers your monthly health insurance premium. You apply for this credit through the Marketplace External Site. If you qualify, you’ll decide whether to have all or some of the health plan subsidy paid in advance to help with premium costs. Your insurance company is notified of the health insurance subsidy amount by the Marketplace, and your premium is adjusted accordingly. If you want to wait until you file your tax return, you can use a portion or all of your credit as a claim on your taxes.
- Cost Sharing Reduction (CSR) External Site reduces the amount you pay during your policy, usually throughout a year, for deductibles, coinsurance and copays — all of which add up to your out-of-pocket maximum, or the total amount you pay in a year. If you qualify, you’ll have to enroll in a specific plan type to be able to use the CSR.
How do you get a health care subsidy?
Qualifying for a health insurance subsidy will depend on where you live, how many people are in your family (spouse and/or dependents), and how much income your household will make.
A study from Kaiser Family Foundation External Site found that 92 percent of current individual market purchases are now eligible for Marketplace subsidies.
Most people will be eligible for the Premium Tax Credit if:
- You file federal income tax returns
- Enroll in a plan through a health insurer or via the Marketplace
- Have an annual household income at or above 100 percent of the federal poverty level External Site for tax year 2021, and
- You are not enrolled in Medicare or Medicaid, or on a health plan through your employer.
The primary factor for qualifying is income. If you make up to four times the federal poverty level you will most likely qualify. For an individual, it’s about $47,000. For a family of four, it’s about $97,000.
If you're an individual who makes about $29,000 or less, or a family of four that makes about $60,000 or less, you may qualify for both subsidies.
What health plans are eligible for a health insurance subsidy?
To receive a health care subsidy, or tax credit, your health plan must be purchased through a health insurance exchange. There are many different plan options that can fit your unique health care needs and budget options. All Wellmark Blue Cross and Blue Shield plans sold on the Marketplace are eligible for subsidies. A trusted agent is a great resource to walk you through the different choices and how your health plan subsidy could reduce some or all of your costs.
How to apply for a health care subsidy?
When you sign up for an individual or family health insurance plan through the Marketplace, you can find out if you qualify for a premium tax credit. Wellmark Blue Cross and Blue Shield licensed agents can help you through this process to make sure you are saving money and getting the level of care you need. If you don’t already have an agent, use our Agent Finder to find one in your area Opens New Window.
