When you apply for coverage in the Health Insurance Marketplace, you’ll find out if you qualify for a “premium tax credit” that lowers your premium – the amount you pay each month to your insurance plan.
The amount of your premium tax credit depends on the estimated household income for 2016 that you put on your Marketplace application.
You can apply some or all of this tax credit to your monthly insurance premium payment. The Marketplace will send your tax credit directly to your insurance company, so you’ll pay less each month. This is called taking an “advance payment of the premium tax credit.”
If your income changes, or if you add or lose members of your household, your premium tax credit will probably change too.
It’s very important to report income and household changes to the Marketplace as soon as possible.
IMPORTANT: If at the end of the year you’ve taken more advance payments of the premium tax credit than you’re eligible for, you may have to pay money back when you file your federal income tax return. This is called “reconciling” the advance payments of the premium tax credit and the actual premium tax credit you qualify for based on your final 2016 income.
In addition to a premium credit, your income qualifies you to save on the out-of-pocket costs you pay whenever you get health care, like deductibles and copayments. But you get these additional savings only if you buy a plan in the Silver category. Learn about cost-sharing reductions.
You can still use the Marketplace to buy a health plan without a premium tax credit. You can also buy a plan outside the Marketplace, where you may find more options.
If you think we made a mistake when you get your eligibility results in the Marketplace, you have the right to appeal.