Minimum Essential Coverage
(The type of coverage an individual needs to have to meet the individual responsibility requirement under the Affordable Care Act. This includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage)
Premium Tax Credits
Q: What kinds of coverage count as Minimum Essential Coverage to satisfy the requirement to have health insurance?
A: Most people with health coverage today have a plan that will count as minimum essential coverage. The following types of health coverage count as minimum essential coverage:
*Employer-sponsored group health plans
*Retiree health plans
*Non-group health insurance that you buy on your own, for example, through the health insurance Marketplace
*Student health insurance plans
*Grandfathered health plans
*The Children’s Health Insurance Program (CHIP)
*TRICARE (military health coverage)
*Veterans’ health care programs
*Peace Corps Volunteer plans
Be aware that outside of the Marketplace, other policies may be for sale that may look like health insurance, such as short term individual policies, or policies that only cover cancer. These kinds of products are sometimes referred to as “excepted benefits.” They do not count as Minimum Essential Coverage.
Q: Who is eligible for Marketplace premium tax credits?
Premium tax credits will be available to U.S. citizens and lawfully present immigrants who purchase coverage in the Marketplace and who have income between 100% and 400% of the federal poverty level. Premium tax credits are also available to lawfully residing immigrants with incomes below 100 percent of the poverty line who are not eligible for Medicaid because of their immigration status. (Generally, immigrants must lawfully reside in the U.S. for five years before they can become eligible for Medicaid.)
In addition, to be eligible for the premium tax credits, individuals must not be eligible for public coverage—including Medicaid, the Children’s Health Insurance Program, Medicare, or military coverage—and must not have access to health insurance through an employer. (There is an exception in cases when the employer plan is unaffordable because the employee share of the premium exceeds 9.5% of the employee’s income. There is also an exception in cases where the employer plan doesn’t provide a minimum level of coverage.)
Q: How do I apply for premium tax credits?
A: On the health insurance Marketplace web site, you will find an Application for Health Coverage and Help Paying Costs. Filling out the application online is the fastest, though you can also submit a paper application or call your Marketplace call center and apply over the phone. The Application will ask you basic information about yourself (and any family members who are applying for coverage with you) including your Social Security number and information about your citizenship or immigration status. It will also ask employment and income information, including what’s on your most recent income tax return. Once you’ve submitted the application, the Marketplace will let you know if you qualify for help paying for Qualified Health Plans it offers. It will also let you know if you (or any members of your family) may be eligible for coverage through Medicaid or the Children’s Health Insurance Program.
To complete the Application for Health Coverage and Help Paying Costs online, you will need to create a secure personal account with a login ID and password.
Q: My income is uneven during the year. Some months I don’t earn anything, other months are better. I’m pretty sure my 2014 income will be less than 400% of the FPL so I’d like to apply for premium subsidies. But what if I’m wrong and my income ends up being more than 400% FPL?
A: It’s common for income to fluctuate, particularly if you are self-employed, perform seasonal work or have multiple jobs. To achieve the most accurate premium tax credit amount, you should report income changes to the health insurance Marketplace during the year, as they happen. Otherwise, if you claim a premium tax credit during the year and your actual 2014 income edges over 400% FPL, you will need to pay back the full credit amount. To avoid this result, if you estimate your 2014 income will be close to 400% FPL, you could also consider waiting until you file your 2014 taxes to take all or a portion of the premium tax credit on your tax return instead of receiving advance payments.
Q: If I have to pay back subsidies, what’s the most I would have to pay back?
A: That depends on what your actual 2014 income turns out to be. If your income goes over 400% FPL you will have to repay the full advance premium tax credit amount you received. If your actual 2014 modified adjusted gross income is higher than what you projected but less than 400% FPL, there are repayment limits based on income. On your tax return, you will compare the actual amount of advance premium tax credit you received during 2014 to the amount you should have received based on your modified adjusted gross income, and then pay back the excess up to the repayment limit.
Q: Can I get premium tax credits for health plans sold outside of the Marketplace?
A: NO. Premium tax credits are only available for coverage purchased in the Marketplace.