The pandemic has underscored the importance of affordable health insurance, but the cost of coverage can be prohibitively expensive, and often steers consumers towards the lowest-cost plan rather than the plan that meets their coverage needs. Thankfully, due to temporarily enhanced federal subsidies available under the American Rescue Plan Act (ARPA), many individuals and families are eligible for additional financial assistance on the Affordable Care Act’s (ACA) marketplaces. Premium and cost-sharing subsidies can help consumers afford coverage and care. As part of CHIR’s weekly series highlighting FAQs from our updated Navigator Resource Guide, this week we answer questions about the financial assistance available through the marketplaces, which are currently open for enrollment.

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 between 100 percent and 400 percent of the federal poverty level, but for 2021 and 2022, there is no limit on household income eligible for premium tax credits. 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 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 to when you can apply for premium tax credits when you have other coverage. For example, there is an exception in cases when the employer plan is unaffordable because the employee’s share of the premium exceeds 9.61 percent of the employee’s household income in 2022 (for 2021, it was 9.83 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).

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.

I filed my tax return but did not reconcile my premium tax credit using Form 8962. Will I be re-enrolled with premium tax credits this year?

In general, you must file your tax return AND reconcile your premium tax credits using Form 8962 for every year you received premium tax credits. If you do not, the marketplace may discontinue premium tax credits for future coverage. However, due to the impact of the COVID-19 pandemic, for plan years 2021 and 2022, you will not lose eligibility for premium tax credits if you did not reconcile your prior year’s premium tax credits.

I’m offered health benefits at work, but they’re not very good. I understand I may be eligible for marketplace subsidies if my job-based plan doesn’t meet a “minimum value” standard. What does that mean?

The term “minimum value” means that your job-based plan would cover at least 60 percent of the costs of covered health services for an average group of people. A minimum value plan must also cover at least inpatient hospitalization and physician services. Most employer plans will meet this test, but some may not. The marketplace application includes a form with questions about job-based coverage. You can take this form to your employer and ask them to fill it out. With that information the marketplace will determine whether the plan meets minimum value. Alternatively, your employer plan is required to provide you a Summary of Benefits and Coverage. This document should tell you whether or not your employer plan meets the minimum value standard. If it doesn’t, you may be able to qualify for premium tax credits to help pay for marketplace coverage.

Stay tuned for more FAQs of the Week on CHIRblog, and find over 300 FAQs and other resources on our updated Navigator Resource Guide.