What are premium tax credits?
Premium tax credits are financial assistance provided by the government to help individuals and families afford health insurance. Premium tax credits are available to those who purchase their health insurance through the marketplace.
Some marketplaces will call it be a different name — subsidy, financial help or financial assistance. The amount of premium tax credit a person may receive is based on their household income, the total number of dependents, and the cost of health insurance premiums in their area. This means that those with lower incomes may be eligible for a larger tax credit, while those with higher incomes may receive a smaller amount or may not be eligible at all.
IMPORTANT! You can't accept both your employer's StretchDollar health benefits and premium tax credits. That would be like trying to double-dip on tax advantages.
How do I know if I'm eligible for premium tax credits?
If you’re unsure if you're eligible for a premium tax credit, check out this calculator.
If I accept the ICHRA, can I claim the premium tax credit for my exchange/marketplace coverage?
No. You may not claim the premium tax credit for your marketplace/exchange coverage for any month you are covered by the ICHRA. Also, you may not claim the premium tax credit for the marketplace coverage of any family members for any month they are covered by the ICHRA.
If I opt out of the ICHRA, can I claim the premium tax credit for my marketplace coverage?
It depends.
- If you opt out of the ICHRA and the ICHRA is considered unaffordable, you may claim the premium tax credit.
- If you opt out of the ICHRA and the ICHRA is considered affordable, you may not claim the premium tax credit.
How do I know if the individual coverage ICHRA I’ve been offered is considered affordable?
One of StretchDollar's licensed brokers can help! Reach out at any time by emailing brokers@stretchdollar.com.