Tax credits could help take the ouch out of Obamacare

With health insurance premiums up dramatically, relief is available for some

The Affordable Care Act is in crisis throughout America, making life difficult for people who need to see a doctor.

Photo by JC Amberlyn.

The Affordable Care Act is in crisis throughout America, making life difficult for people who need to see a doctor.

KINGMAN – While premiums for insurance under the Affordable Care Act are expected to increase by 25 percent on average, tax credits are also increasing and that should help offset some of the costs.

The premium tax credits can be used in three ways, explained Bryon Lewis, a health benefits expert with North Country HealthCare.

One option is to take the credit immediately and lower your monthly premium on a marketplace plan.

You can also pay the full premium amount and get the tax credit back at the end of the year. This is beneficial for self-employed people who may see a large fluctuation in their income from quarter to quarter, Lewis said.

The third way is a combination of the first two in which you would place some of the tax credit toward the premium.

Tax credits are based on income of people making between 100 percent and 400 percent of the Federal Poverty Level, or FPL, which is $11,770 for an individual and $24,250 for a family of four in 2016.

The ACA premium tax credits have replaced the HCTC health care tax credits since 2013.

The tax credits cap your monthly premium between 2 percent and 9.5 percent of total modified adjusted gross income for each household member. Caps are based on the benchmark silver plan, which is the second-lowest.

The less income you have, the lower the percentage you pay for the plan. If your income changes, so will the amount of assistance.

Meeting the tax credit criteria:

• You shop through the ACA health insurance marketplace.

• Income between 100 percent and 400 percent of FPL.

• Not eligible for other coverage such as employer-based.

• Not married filing separately status.