27 February 2013
In 2013 I was elated to use my first W-2 in Los Angeles. I just couldn't wait to see how much money I'd get on H&R Block's website to pay off my parking tickets. Once I finished my tax return, I read the following pop-up: "You may qualify for subsidies in 2014.". If you're an individual who earns between $17,000 and $44,000, you'll probably see a similar message every tax season for the foreseeable future.
Health insurance subsidies are simply amounts of money the government pays toward your health insurance. They're only available to people who buy "on-exchange" health insurance plans, which translates to ones offered by the "exchange" aka "marketplace" known as Covered California.
That doesn't mean you have to buy it directly from the state's health insurance marketplace, located in Sacramento. A much closer certified insurance agent in the San Fernando Valley for example can offer the same marketplace plans with health insurance subsidies.
What confuses the average customer is how Anthem Blue Cross, Kaiser Permanente, Health Net, and other major providers are affected by on-exchange versus off-exchange insurance plans.
Most major providers offer Covered California plans (on-exchange) and private plans (off-exchange). Often, the plans are identical, but one comes with financial assistance so a teacher can still buy a rich insurance plan and afford it because she qualifies for health insurance subsidies. On the flip side, the oil tycoon can buy the equivalent plan privately and pay for it without government help.
A Covered California insurance agent can easily start an application through the state marketplace and quote how much financial assistance you might qualify for without any paperwork. Since you must report your income to start the process, eventually you'll need to provide a copy of your tax return or other proof of income.
For families to qualify, the combined income of both spouses must be between 100% and 400% of the Federal Poverty Level (FPL). For example, a family of four who makes up to around $88,000 will qualify for subsidies through Covered California.
If you don't feel like doing the math, just as an insurance agent to do it for you. Enrollment is free, just like the free calculator we give away.