In 2017 93% of people who purchased their own health coverage in Alaska received a subsidy to help cover their monthly premium cost.
This subsidy is the primary form of financial help available from the federal government. It’s also known as a premium tax credit. A subsidy may help you buy a health plan for little or no cost. Premera is still the only health insurance carrier offering individual health plans in Alaska. While all of our individual health plans will change in 2019, the average premium cost is lower by 6.5 percent compared to 2018.
Here’s a guide to help you understand how to qualify and apply for tax credits.
Qualifying for a tax credit
The tax credit is based on your household income and family size. The amount of the tax credit is determined by your estimated income, specifically your modified adjusted gross income. Your 2017 tax forms (or 1040) can help you estimate your income for 2019. You’ll also need to update your information if your income changes because of a job loss or if your employer no longer provides health coverage.
In order to qualify, an individual cannot make more than 400% of the Federal Poverty Line.
- In 2018, the FPL in Alaska was $15,180 for an individual and $31,380 for a family of 4.
- An individual’s income would need to be less than $60,720.
- For a family of 4, household income would need to be under $125,520.
Reducing your monthly premium
If you qualify for aid, you have 2 options:
- You can apply part or all your tax credit to lower your monthly payment. The federal government will pay your health insurance company.
- You could also wait to claim your tax credit at the end of the year when you file your income tax return.
Whichever way you apply it, your tax credit is based on your estimated income and may be adjusted when you file your tax return. For example, if the credit awarded when you bought your plan is less than what you’re due, you’ll receive the difference as a refundable credit on your income taxes. Or, if the tax credit for the year is more than what your income allows, you’ll need to repay the difference on your tax return. It’s important to note that if your income changes dramatically during the year, you will want to contact your insurance company or Healthcare.gov so that your tax credit is adjusted accordingly.
Re-qualifying in 2019
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Stay with Premera
Open enrollment is here! Log in to your Premera account to see any changes to your 2019 plan and to let us know if you intend to keep your plan next year or shop for a new plan.
Stay with Premera
Open enrollment is here! Log in to your Premera account to see any changes to your 2019 plan and to let us know if you intend to keep your plan next year or shop for a new plan.
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If you purchased health insurance in 2018, you’ll need to re-apply for a 2019 tax credit. Keep in mind that you’re not eligible for financial help if you’re on Medicare or certain other government programs. Your financial eligibility will be re-verified each year when you renew your health plan.