The health care law helps many people pay for health insurance. Based on your income, family size and the health plan you choose, you may qualify for tax credits and help paying for coverage.
Tax credits are available when you enroll in coverage on the Health Insurance Marketplace. The Marketplace provides a way for you to compare and buy a health insurance plan that best fits your needs. You can enroll for health insurance during open enrollment.
These credits will help eligible people pay for insurance premiums – the monthly cost of coverage. They are available to people who purchase coverage on their own (not with an employer) through the Marketplace. The credit is designed so even those who have little or no income or do not file an income tax return can still benefit. If you qualify, the credit can be paid in advance to your insurance company.
Financial assistance is determined by your household income, family size, and the health plan you choose. If you meet income requirements, your health plan will pay a greater amount of covered costs, reducing how much you pay. For example, you may pick a plan for which you pay from 10 to 40% of covered costs. The amount is also based in part on any medical procedure or tests you have – each may have a deductible or coinsurance cost.
As of today, ACA still requires most Americans to purchase health coverage or pay a penalty.* Failing to obtain insurance may result in a tax penalty on your annual income tax return.
In 2017, the tax penalty will increase annually by a cost-of-living adjustment or 2.5% of the total household taxable income (whichever is greater).
*A few groups/individuals are exempt: certain religious groups, American Indians and people who are incarcerated or in financial hardship.
You may compare and buy a health plan on the Marketplace during open enrollment.