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Information You Need to Use the Estimator

You will need to provide:

  • An estimate of your monthly income,
  • Your family size, the age of each member, and whether any are enrolled in a qualifying health plan through the Marketplace and not eligible for other coverage,
  • Your expected filing status,
  • The state and county where you live,
  • The cost of the benchmark plan used in calculating the advance payments of the credit if you live in a state that has its own Marketplace,
  • The monthly premium for the health insurance in which you are enrolled, and
  • The monthly advance payments of the credit (if any).

Information about Your Household

Your family size and household income is necessary because that information is used to determine your percent of the federal poverty line, which is used in determining the amount of your credit.

The age of each family member, whether they are enrolled in a qualifying health plan through the Marketplace and are not eligible for other health coverage are necessary because that information helps determine eligibility for the credit and is used to determine your benchmark plan. Your benchmark plan amount is also used in determining your credit.

Health Insurance Premium You Pay

The premium is the total cost of health insurance before any advance payments of the premium tax credit or other subsidies are applied.

Benchmark Plan

The premium tax credit is tied to the benchmark plan - the second lowest cost silver plan available in your area that covers the members of your family (you, your spouse, and your dependents) who are enrolled in Marketplace coverage and not eligible for other health insurance coverage such as employer-sponsored or government-sponsored coverage. The cost of the actual plan you selected might differ from that of the benchmark plan.

There are 5 basic categories of Marketplace insurance plans: catastrophic, bronze, silver, gold, and platinum. Plans in these categories differ based on how you and the plan share the costs of your care. As the metal category increases in value, e.g. from bronze to gold, so does the percent of medical expenses that a health plan will cover. The plans available to you generally depend on where you live, your family size, and the age of each family member.

Important

Catastrophic plans don't meet the requirements for qualified health plans under the rules for the premium tax credit. If you enrolled in a Catastrophic plan, you won't qualify for the credit.

If you purchased your health insurance through the federal Marketplace at Healthcare.gov, the estimator will enter the benchmark plan amount for you.

State-Based Marketplaces

If you purchased your health insurance through any of the state Marketplaces, you’ll need to enter the cost of your benchmark plan in Step 1 of the computation process to help estimate how your premium tax credit changes when your income or family size changes. If the Marketplace didn’t provide you with the benchmark plan information, you may be able to obtain it by contacting the Marketplace where you signed up for your insurance.

KEY TERMS

Applicable Percent

The percent of your income that you are considered able to afford for your and your family's health insurance.

Household income %
of Federal poverty line
Initial % Final %
< 133% 2.0 2.0
133% - 150% 3.0 4.0
150% - 200% 4.0 6.3
200% - 250% 6.3 8.05
250% - 300% 8.05 9.5
300% - 400% 9.5 9.5

Benchmark Plan

The benchmark plan is the second lowest cost silver plan available in your area that covers the members of your family (you, your spouse and your dependents) who are enrolled in Marketplace coverage and not eligible for other health insurance coverage such as employer-sponsored or government-sponsored coverage.

The premium tax credit is the lesser of:

  • The premiums for the plan in which you and/or your family members enroll,

or

  • The premium for your benchmark plan minus your contribution amount.

Contribution Amount

The contribution amount is the amount you are considered to be able to afford to pay for health insurance. It would be the amount you pay if you enroll in your benchmark plan.

Determined by multiplying your annual household income by your applicable percent.

Family

Generally you (if no one can claim you as a dependent), your spouse (if married and both spouses are on the same return), and anyone else that you are able to claim as a dependent.

Federal Poverty Line

The poverty guidelines published by the Department of Health & Human Services.

HHS Federal Poverty Guidelines for 2015.

Eligibility for the premium tax credit for 2016 is based on the 2015 guidelines.

Health Insurance Marketplace

One of the state or the federal exchanges where you can shop for and purchase health insurance.

Health Insurance Premium

This is the total cost of the plan you choose on the Exchange before the premium tax credit is applied.

Household Income

Household income is your modified adjusted gross income (MAGI) and the MAGI of your spouse if you file a joint return, plus the MAGI of your dependents who are required to file a federal tax return.

Modified adjusted gross income is the adjusted gross income as reported on Form 1040 plus any:

  • Foreign earned income exclusion,
  • Nontaxable Social Security benefits (including tier 1 railroad retirement benefits), and
  • Tax-exempt interest.

It does not include Supplemental Security Income (SSI).

Silver Plan

Marketplace insurance plans are categorized by metal levels: bronze, silver, gold, and platinum. The metal level is based on how much the insurer pays for services covered under the plan.

A silver plan is a health insurance plan where the insurer pays on average 70% of the cost of covered services.

The premium tax credit is limited by comparing the cost of your coverage to that of the second lowest cost silver plan that covers you and your family.

If you are enrolled in more expensive coverage, you will pay the additional amount. However, if you are enrolled in coverage that costs less, your share of the premium will also be less.

For more information, go to healthcare.gov