[su_box title=”Here’s what you need to know…” style=”default”]
- The minimum income required to participate in Obamacare benefits is 100 percent of the federal poverty level
- Income determines costs assistance subsidies for tax credits, cost-sharing reductions, and Medicaid and CHIP eligibility.
- Those falling below the federal poverty line can get Medicaid
- Those within 138 percent of the federal poverty level can get Expanded Medicaid
Applicants must use the level of income determined by records or estimates during the open enrollment period or any applicable special enrollment period. Open enrollment limits the time to get coverage under Obamacare but not under Medicaid and CHIP.
These need-based programs have a continuous open enrollment as the government intends them to provide emergency and child protection for low-income persons and families.
During open or special enrollment, consumers should use comparison shopping to get the best possible outcome. Comparison shopping can focus on the benefits of plans of most concern to the subscriber; this includes facilities, medical resources, and particular services. Compare health insurance rates now by using our FREE tool above!
The Individual Mandate
The individual mandate applies to every person in the US not exempted from its requirement for insurance coverage. This grouping includes everyone required to file an income tax return because their income is above the tax filing threshold. It does not include those not lawfully present in the US such as illegal immigrants. Those who have income is a larger group than those who must file a tax return because some income is exempt from taxation. Those with income and not required to file a tax return are not required to have health insurance.
Minimum Income Required
The federal poverty level is a key piece of information for determining income needed for Obamacare. Those who fall below the Obamacare minimum can get Medicaid through Obamacare Expansion. However, those who live in states with Republican governors and legislatures that blocked Obamacare will not get Medicaid expansion, and many of those millions of Americans will not get the benefit of low or no costs healthcare that the Congress intended them to get.
When insurance costs exceed the range provided by rule for affordable coverage, individuals may be exempt from the mandate. The eight percent rule provides an exemption when the lowest cost insurance exceeds 8 percent of annual income. A similar result occurs when employer-sponsored coverage exceeds 9.5 percent of annual income. The government based affordable coverage on the prices of benchmark plans, and it essentially caps the costs of qualified insurance coverage.
The annual income for a family or household is an important piece of income information for Obamacare. The precise formula for determining costs assistance is called the modified adjusted gross income or MAGI. A single filer would use MAGI to determine eligibility for Obamacare and any benefits.
A dependent would use an adjusted gross income to determine income that differs from MAGI, which covers heads of families or households. All of these computations use the
All of these computations use the federal poverty level as a basis. For example, those with incomes in the range of 100 percent to 250 percent of the federal poverty level can get out-of-pocket expense reduction on Silver Plans
Obamacare Premium Assistance
Obamacare financial benefits require a minimum level of income. This is due to the use of tax credits to subsidize premiums. One must qualify to have tax credits that use the annual income to determine the size of the credit. Tax credits go to persons that earn between 100 percent to 400 percent of the federal poverty level. The benefits decline with the amount of income above the poverty level minimum. The greater benefits go to those who earn least. The income figures for individuals or families can go lower with the use of deductions. Deductions can increase eligibility and provide higher levels of benefits. The below-listed figures describe the federal poverty levels for individual and family incomes.
- 2016 individual FPL minimum is $11,770
- 2016 individual FPL maximum is $47,080
- 2016 family FPL minimum is $24,250
- 2016 family FPL maximum is $97,000
Determining Costs Assistance for Obamacare
Premium tax credits have a formula based on a benchmark plan. The Second Lowest Cost Silver Plan is the foundation for determining the amounts of costs assistance in Obamacare.
Income That Does not Qualify
There are few exceptions to the rule that all income is taxable. One is the category of persons who have severe disabilities. Many of these citizens and residents get supplemental income from Social Security Administration. These persons often have severe life limitations such as blindness, paralysis, and nearly complete dependencies for survival. Funds for these persons come from a designation of Supplemental Security Income or SSI. These persons and this income are not subject to annual tax filing requirements. There are other categories of tax-exempt income such as income from municipal bonds and distributions from nontaxable savings and retirement accounts like Roth IRA
A major advantage for self-employed persons under Obamacare is that self-employment income permits deduction of Obamacare health insurance premiums and dental insurance premiums. Further, itemized health care deductions allow taxpayers to handle most expenses as items.
Income tax deductible health insurance premiums and medical expenses can reduce the effective costs of health care substantially.
The self-employed coverage obtained through healthcare.gov, or the Obamacare marketplace meets the requirements of the individual mandate. Essential health benefits provide a significant amount of services each year at no extra costs to consumers; these benefits are valuable health protections for small business owners whose health is a major asset for their businesses.
Obamacare uses an income unit called a household. The household concept is a tax family group that consists of the people who file a family form, and cost assistance benefits go on the basis of a coverage family, which includes those who share a policy. The household has a simple structure for assessing income. It has a head of household, spouse, and dependents. Household size includes those filing a single form, and this is true whether they seek coverage.
Self-Employed Comparison Shopping Advantage
Comparison shopping is a key element in getting the best value for self-employed insurance coverage. Obamacare subsidies are complex and apply in particular ways to specific circumstances. Those with one additional employee can instead use the SHOP system and take advantage of tax credits for providing health coverage for employees. Small business owners can participate in company-sponsored health plans. Enter your zip code in our FREE tool below to compare health insurance rates now!