By Kyle Maziarz
Open Enrollment for 2024 is in full swing, and thanks to a temporary expansion of federal premium subsidies, most Marketplace enrollees qualify for coverage at a very low monthly cost. This week, we’re highlighting frequently asked questions (FAQs) from our Navigator Resource Guide regarding the financial assistance available through the Marketplace.
Who is eligible for Marketplace premium tax credits?
Premium tax credits are available to U.S. citizens and lawfully present immigrants who purchase coverage in the Marketplace. In general, individuals must also have household income above 100 percent 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. However, states have the option to waive the 5-year waiting period for children and pregnancy coverage. See our state fact sheets for details.)
In addition, to be eligible for the premium tax credits, individuals must not be eligible for public coverage—including most Medicaid, most Children’s Health Insurance Program coverage, Medicare, or military coverage—and must not have access to affordable, adequate health insurance through an employer. There are exceptions. For example, there is an exception in cases when the employer plan is unaffordable because the employee’s share of the premium exceeds 8.39 percent of the employee’s household income in 2024 (for 2023, it was 9.12 percent). There is also an exception in cases where the employer plan doesn’t meet a minimum value (the plan must cover at least 60 percent of the cost of covered services for a standard population, and it must include substantial coverage of physician and inpatient hospital services). (26 C.F.R. 1.36B-6; 26 U.S.C. §36B; IRS Revenue Procedure 2023-29.)
What income is counted in determining my eligibility for premium tax credits?
Eligibility for premium tax credits is based on your expected household income for the year in which you are applying for coverage. For example, if you are applying for coverage to start in January 2024, you should estimate your projected income for 2024.
The Marketplace assesses your Modified Adjusted Gross Income, or MAGI, to determine your eligibility for premium tax credits. When you file a federal income tax return, you must report your adjusted gross income (which includes wages and salaries, interest and dividends, unemployment benefits, and several other sources of income). MAGI modifies your adjusted gross income by adding to it any non-taxable Social Security benefits you receive, any tax-exempt interest you earn, and any foreign income you earned that was excluded from your income for tax purposes.
To learn more about what details to include in your household income estimate, see HealthCare.gov’s table on what to include in your income estimate.
Note that eligibility for Medicaid and CHIP is also based on MAGI (unless you qualify on the basis of disability or are dually eligible for Medicare) , although some additional modifications may be made in determining eligibility for these programs. Contact your Marketplace or your state Medicaid program for more information. (26 C.F.R. § 1.36B-1; IRS, Questions and Answers on the Premium Tax Credit.)
I can’t afford to pay much for deductibles and co-pays. Is there help for me in the Marketplace for cost-sharing?
Yes. If your income is between 100 percent and 250 percent of the federal poverty level, you may qualify for cost-sharing reductions in addition to premium tax credits. These will reduce the deductibles, co-pays, and other cost-sharing that would otherwise apply to covered services.
The cost-sharing reductions are available through modified versions of silver plans that are offered on the Marketplace. These plans will have lower deductibles, co-pays, coinsurance and out-of-pocket limits compared to regular silver plans. Once the Marketplace determines you are eligible for cost-sharing reductions, you will be able to select one of these modified silver plans, based on your income level. (45 C.F.R. § 155.305.)
Look out for additional FAQs of the week throughout Open Enrollment, and check out the Navigator Resource Guide for even more FAQs and other helpful resources.