Under the Affordable Care Act (ACA), you must have a minimum level of health insurance coverage or pay a penalty, unless you meet one of the exceptions.
This is easy for people who get coverage through work, or can not afford to pay large premiums to their own plan. It is also not a problem for people who are already on Medicare or other government programs for health care.
These are the people of the community, those who need to buy health insurance themselves, but can not quite make the premiums that need help.
This is where the ACA grants come in. A health care grant is financial aid launched by the government to help make affordable medical coverage.
Here's how ACA grants work short
If you think you qualify for grants, for coverage through market sponsored by the government (commonly known as the insurance exchange disease). Grants are available only through the exchange.
Estimate how much income you think you will have for the year and receive a subsidy based on your income level and other factors. This subsidy is in fact an estimated amount the government pays the insurance company on your behalf.
The next year when you file your taxes, you may have to repay part or all of the grant if it proves you made more income than you estimated, or otherwise are not eligible.
Are you eligible for a credit or a tax subsidy?
The best way to find out if you qualify for a grant to the ACA is to use the tax penalty calculator healthcare TaxAct
You may be eligible for a grant if all the following conditions are met :.
- Your employer does not provide affordable health insurance for you. In this case, affordable insurance means at least 60 percent of covered benefits or premiums will cost no more than 9.5 percent from your annual household income after tax credits are applied.
- You buy insurance coverage through an GOVERNMENT AND sponsored market.
- your annual household income is between 100 and 400 percent of the federal poverty level, according to the requirements of your specific state.
application of subsidized health insurance
you can apply for a grant when buying health insurance through an exchange of government. Depending on your state, you may need to use markets for health insurance of state, the federal Medicare market, or a hybrid of both. As you request, you will be asked questions to help you claim the credit.
When you get insurance, the government pays a subsidy directly to your health insurance provider. You pay your share of the premiums.
Filing next year
When you file your taxes for the year, the amount of your actual subsidy is determined by the annual income you earned. If the grant is exactly the same as the amount paid to the insurance company on your behalf, there will be no impact on your taxes
If you have received a larger grant than you should to have. For example, if you worked more during the last half of the year and made more money, or you received a raise, you have to repay part or all of the grant you received.
On the other hand, if you earned less income than expected, you may not have received all the grants for which you qualify. In this case, you will get a refund of the additional part of the grant that you received.
Keep in mind that you should not take a subsidy. If you pay the entire premium and it appears you qualify for a grant, you will receive when you file your tax return. The grant will then reduce your tax liability or increase your amount of tax refund next year.
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