Premium & Cost Sharing Subsidies to Individuals
Eligibility
Premium credits and cost-sharing subsidies are available through the Exchanges to U.S. citizens and legal immigrants who meet certain income limits. Employees who are offered coverage by an employer are not eligible for premium credits unless the employer plan does not have an actuarial value of at least 60% or if the employee share of the premium exceeds 9.5% of income. Legal immigrants who are barred from enrolling in Medicaid during their first five years in the U.S. will be eligible for premium credits.
Verification
Income and citizenship status verification is required to determine eligibility for the federal premium credits.Premium Credits
Refundable and advanceable premium credits are available to eligible individuals and families with incomes between 100-400% of Federal Poverty Level (FPL) to purchase insurance through the Exhanges. The premium credits will be tied to the second lowest cost silver plan in the area and will be set on a sliding scale such that the premium contributions are limited to the following percentages of income for specified income levels:
- Up to 133% FPL: 2% of income
- 133-150% FPL: 3 – 4% of income
- 150-200% FPL: 4 – 6.3% of income
- 200-250% FPL: 6.3 – 8.05% of income
- 250-300% FPL: 8.05 – 9.5% of income
- 300-400% FPL: 9.5% of income
Premium Contributions for those receiving subsidies may increase annually to reflect the excess of the premium growth over the rate of income growth for 2014-2018.Beginning in 2019, premium contributions may adjust to reflect the excess of premium growth over CPI if aggregate premiums and cost sharing subsidies exceed .54% of GDP.
Provisions related to the premium and cost-sharing subsidies are effective January 1, 2014.
Cost-Sharing Subsidies
Cost- sharing subsidies are available to eligible individuals and families. The cost-sharing credits reduce the cost-sharing amounts and annual cost-sharing limits have the effect of increasing the actuarial value of the basic benefit plan to the following percentages of the full value of the plan for the specified income level:
- 100-150% FPL: 94%
- 150-200% FPL: 87%
- 200-250% FPL: 73%
- 250-400% FPL: 70%
Subsidies and Abortion coverage
Federal premium or cost-sharing subsidies are not used to purchase coverage for abortionif coverage extends beyond saving the life of the woman or cases of rape or incest (Hyde amendment).
If an individual who receives federal assistance purchases coverage in a plan that chooses to cover
abortion services beyond those for which federal funds are permitted, those federal subsidy funds (for
premiums or cost-sharing) must not be used for the purchase of the abortion coverage and must be
segregated from private premium payments or state funds.
Small Business Tax Credits
Tax credits are provided to small employers with no more than 25 employees and average annual wages of less than $50,000 that purchase health insurance for employees.
– Phase I: For tax years 2010 through 2013, a tax credit will be provided of up to 35% of the employer’s
contribution toward the employee’s health insurance premium if the employer contributes at least
50% of the total premium cost or 50% of a benchmark premium. The full credit will be available to
employers with 10 or fewer employees and average annual wages of less than $25,000. The credit
phases-out as firm size and average wage increases. Tax-exempt small businesses meeting these
requirements are eligible for tax credits of up to 25% of the employer’s contribution toward the
employee’s health insurance premium.
– Phase II: For tax years 2014 and later, for eligible small businesses that purchase coverage through
the state Exchange, a tax credit will be provided of up to 50% of the employer’s contribution toward the
employee’s health insurance premium if the employer contributes at least 50% of the total premium
cost. The credit will be available for two years. The full credit will be available to employers with 10 or
fewer employees and average annual wages of less than $25,000. The credit phases-out as firm size
and average wage increases. Tax-exempt small businesses meeting these requirements are eligible
for tax credits of up to 35% of the employer’s contribution toward the employee’s health insurance
premium.
Reinsurance program
A temporary reinsurance program will be created for employers providing health insurance coverage to retirees over the age of 55 who are not eligible for Medicare. The prior program will reimburse employers or insurers for 80% of retiree claims between $15,000 and $90,000. Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan. $5 billion is appropriated to finance the program. (Effective 90 days following enactment through January 1, 2014)