Getting a financial break on health insurance

premium tax credit Wednesday, October 31, 2018

Most people who purchased individual health coverage through Washington Healthplanfinder received a subsidy to help cover their costs in 2017, according to the Office of the Insurance Commissioner.

This subsidy is the main way you can get help from the federal government to cover your health insurance premium cost. It’s also known as a premium tax credit.

Here’s how you can find out if you’re eligible and how to apply for financial help.

Tax credit qualification

The tax credit is based on your household income and family size. The amount of the tax credit is determined by your estimated income. Your 2017 tax forms (or 1040) can help you estimate your income for 2019. You'll also need to update your information if your income changes because of a job loss or if your employer no longer provides health coverage.

Individuals and families who earn between 100 to 400 percent of the Federal Poverty Line may qualify:

  • The FPL was $12,140 for an individual and $25,100 for a family of 4 in 2018.
  • That means an individual’s income would need to be less than $48,560.
  • For a family of 4, household income would need to be under $100,400.

Reducing your monthly premium

If you qualify for aid, you have 2 options:

  1. You can apply part or all your tax credit to lower your monthly payment. The federal government will pay your health insurance company.
  2. You can wait to claim your tax credit at the end of the year when you file your income tax return.

Whichever way you apply it, your tax credit is based on your estimated income and may be adjusted when you file your tax return. For example, the credit awarded when you bought your plan may end up less than what you're due. If so, you'll receive the difference as a refundable credit on your income taxes. Or the tax credit for the year may add up to more than your income allows. Then you'll need to repay the difference on your tax return.

You can take action if your income changes dramatically during the year. You’ll want to contact Washington Healthplanfinder so they adjust your tax credit.

Re-qualifying in 2019

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If you purchased health insurance in 2018, you'll need to re-apply for a 2019 tax credit.

Keep in mind that you're not eligible for financial help if you're on Medicare or certain other government programs. Your financial eligibility will be re-verified each year when you renew your health plan.