HealthCare Reform Q & A with Michael Bertrand

I make 40k per year. Am I eligible for a government subsidy?

Tyrell P. – Houston, TX

Hi Tyrell.  You might be eligible for a government subsidy to help you with your monthly health insurance premiums.  But your eligibility for a subsidy is not just based on your income – it’s also based on your household size, as well as the income that other members of your household earn.

Subsidies are available to those who earn less than 400% of the federal poverty level.  For an individual, that equates to about $45,000 per year.  But like I said, it also depends on your household size.  Are you married?  Do you have children that live at home, and that you claim as dependents on your taxes?  If so, that changes the equation.

For a married couple, you could earn up to $60,000 per year and still be eligible for a subsidy.  And a family of four can earn up to $95,000 year, and still potentially qualify for a subsidy!  It’s a tremendous benefit for hard working Americans.

There are a few things to be aware of.  First, any income earned by members of your household must be taken into consideration.  If you file one tax return for you, your spouse, and your children, then any income earned by those family members must be included as your subsidy eligibility is determined.  A simple rule of thumb is that if they are on your tax return, then their income must be counted!

Secondly, be aware that subsidies are offered on a sliding scale.  Those with the most need are offered the most help.  So an individual making $20,000 per year receives more assistance than someone like yourself making $40,000 per year.

Third, always keep in mind that these subsides are a function of your taxes.  Technically, the IRS calls them “advanceable, refundable tax credits.”  If your income changes dramatically during the year – say you get a promotion, or a family member starts working – that may impact the amount of subsidy you receive.  That could, in some situations, require you to “true up” with the IRS when you file your taxes.

Tyrell, finding out if you qualify for a subsidy – and what kind of coverage you can use that subsidy on in your hometown of Houston – is something a licensed health insurance agent can help you with.  I encourage you to call iCan today to discuss your 2015 coverage options.

Michael Bertrand is the Government and Industry Relations Director for the iCan Benefit Group. An attorney by trade, Michael spent several years as an insurance regulator and served as Vermont's Commissioner of Banking, Insurance and Health Care Administration from 2010-2011, wherein he regulated the insurance industry in the state of Vermont and its fourteen (14) hospitals. The information or opinions contained herein are for informational purposes only as a service to the public, and is not legal or tax advice, or a substitute for legal or tax counsel