It is July 2023 and in this video we are going over Premium Tax Credits as they relate to Health Insurance.
A Premium Tax Credit is a government paid tax credit that can help reduce your monthly or annual health insurance premiums. They make your monthly premiums more affordable based on your income.
To qualify for a Premium Tax Credit you must meet income requirements and you cannot be eligible for other government health insurance, eg. Medicaid, or a qualifying employer sponsored health insurance plan.
To receive a Premium Tax Credit you must obtain insurance through a Federal or State health insurance marketplace. In Washington, the marketplace is WAHealthPlanFinder.
The amount of your Premium Tax Credit is based on your income and household size. Lower household incomes result in higher Premium Tax Credits and higher household incomes result in lower Premium Tax Credits.
Your Premium Tax Credit amount is based on your estimated annual income for the year, and is applied each month directly toward your insurance premium. Say your total premium is $500 per month, and based on your income you receive a $350 premium tax credit. You would only be responsible to pay the remaining $150 per month toward your health insurance premium.
If, when filing your taxes for the year, it turns out you earned more income than expected, you would have to repay some of your received Premium Tax Credit as part of your taxes due. Alternatively, if, when filing your taxes for the year, it turns out you earned less income than expected, you would be refunded additional Premium Tax Credits. With this in mind, it’s important to estimate your income as accurately as possible, and to update your income with WA Healthplanfinder if your income changes significantly during the year.
This covers the basics of Premium Tax Credits, but it can be a confusing topic. If you have questions, reach out to us here at Mountain View Insurance!
