The APTC, or Advance Premium Tax Credit, was part of the Affordable Care Act which went into effect in 2014. It is a tax credit you receive in advance throughout the year that goes directly toward lowering your monthly health insurance premium. You must apply for the APTC and be enrolled in a health plan on the health insurance marketplace (also called exchange) to receive it. The amount of tax credit you receive is based on the following factors:
As previously mentioned, in order to receive the tax credit, you must apply and qualify for it and be enrolled in a plan on the marketplace. Some states, such as Idaho, have their own state-based marketplaces (yourhealthidaho.org). Other states use the federal marketplace at healthcare.gov.
When applying for an APTC, you will estimate your income for the year which will be one of the determining factors of how much, if any, tax credit you will receive. It is important to be as accurate as possible with this estimate because when tax season comes around everything gets reconciled.
If you are enrolled in a health plan on the marketplace without a tax credit, you can apply for a tax credit at any time during the year. You can also adjust your income estimate at any time. If you are not enrolled on the marketplace, you can only enroll in a plan during the Open Enrollment Period at the end of the year. The only exception are made for qualifying life events like losing other coverage or having a baby which give you a Special Enrollment Period.
CSR stands for Cost Sharing Reductions. These are additional benefits that you can qualify for based on your APTC application. While the APTC lowers your monthly premium, CSR lower your deductibles, copayments, coinsurance and max out of pocket. These extra benefits only apply to the silver level plans on the marketplace and in some cases make them even better than the gold level plans. Just because you qualify for CSR, doesn’t mean you absolutely need to enroll in a silver plan to get those benefits. Not all CSR are created equal, there are actually 3 different levels. The lowest level does not really change the benefits all that much, and depending on the premium and the person it might make more sense to enroll in a bronze or gold plan and just ignore the CSR.
It all depends on the situation! That is why the most important recommendation isn’t which plan level to go with. It is the recommendation to find an agent/broker to work with to help you find the plan that is right for your situation. Our services don’t cost you anything, so give us a call and we can talk through your needs to make sure you get the right plan for you.
