If you sell individual health insurance plans, then you no doubt know about the enhanced premium tax credits available through the end of 2025. During COVID, the tax credits were increased and the subsidy cliff (the 400% income level after which tax credits are not longer available) was eliminated for two years; these enhanced credits were later extended for an additional two years.
Even though the increased financial assistance has been in place since 2022, not all consumers have caught on. In fact, you may have heard from clients who don’t believe they will qualify for a tax credit because of their income when they do, in fact, qualify for a substantial subsidy.
The easiest way to convince them, of course, is to Show Them the Money! And there are a couple tools out there to help you do this.
One is the very popular KFF Subsidy Calculator, available at https://www.kff.org/interactive/subsidy-calculator. With this easy-to-use tool, visitors can determine their likely subsidy amount by entering just a few pieces of information:
With this information, the KFF Subsidy Calculator says whether the visitor is likely eligible for financial aid or not, where their income is in relation to the federal poverty line, their estimated premium tax credit and the remaining monthly cost for the benchmark silver-level plan, and what they would have to pay without a subsidy.
This information is eye-opening for many clients and a powerful tool for brokers who want to encourage their clients to apply for coverage.
As you might expect, there is also a calculator tool available on the Healthcare.gov website without creating an account or logging in. It’s available at https://www.healthcare.gov/lower-costs. It’s a little different from the KFF tool because it initially asks only for the state (not zip code), household size, and income range. The income range is adjusted based on the state and household size and falls into one of four categories: 1) below the threshold to qualify for a tax credit, 2) eligible for a premium tax credit and cost sharing reduction, 3) eligible for a premium tax credit only, and 4) not likely eligible for a tax credit. Those that likely qualify can move on, get a personalized quote, and apply for coverage.
There are other tools out there, of course, but these two popular and easy-to-access tools are great starters if your goal is simply to educate your clients about their possible tax credit eligibility, so consider giving them a try if you’re not using them already.
The open enrollment period for 2024 individual plans begins November 1, 2023 and ends January 15, 2024.