Health Insurance Guide For The Self-Employed
By Rebecca Yates
Chapter 7: Government subsidies
If you fell into the table in Tip #1, then your cost of premiums are directly related to your income and family size! Yup! You’ve probably heard the term “subsidy” in the news in direct relation to your health insurance. Well, what they really mean are Advanced Premium Tax Credits. That means the federal government uses the amount of income (modified adjusted gross) and the size of your family to estimate a tax credit for you. Rather than making you wait to access those funds until next April, they take that credit, divide it by 12 and pay it to the insurance carrier for you. That means it decreases the bill you get for your health insurance every single month.
Generally, if you make under 138% of the federal poverty level, you would be eligible for state-based Medicaid programs. If you fall under 250%, your kids may be eligible for a state-based program, and you would be eligible for a federal program. This free money, people! TAKE IT!! Self employed folks, especially those just starting out, need all the help they can get when it comes to cash flow! To access any of this assistance you must apply either on the federal exchange or on your state exchange. You can go to www.healthcare.gov to see where you need to apply.
You may also qualify for a second type of subsidy called a Cost Sharing Reduction. The government realized that if you couldn’t afford a high monthly premium, you also could not afford to pay for a crazy high deductible. Folks that fall into this category can qualify to get a $0 premium pre-month plan with a $0 deductible!
If you make more than 400% of the federal poverty level, then you no longer qualify for a tax subsidy and you will want to talk to your local agent about finding alternatives, including offering a group plan. In most markets you must have at least one other employee to offer a group plan.
Navigating the complex world of health insurance can be daunting. The Ark Insurance Solutions team has the skill and experience to guide you. We’ll help you compare health plans to make the best decision based on your unique circumstances and budget. Give us a call at 801-901-7800 or click here to schedule an appointment with us.