The new federal Exchange or Marketplace is beginning to take shape.

For individuals earning less than 400% of the federal poverty level (FLP) who are not offered affordable, minimum value insurance coverage by their employer, the federal Exchange will provide tax credits which will directly reduce the cost of health insurance.

Who is eligible for the health insurance premium tax credit?

The final regulations provide that a taxpayer is generally eligible for the credit only for any month that: 

• The taxpayer's household income for the year is between 100% and 400% of the federal poverty level (FPL) for the taxpayer's family size for the taxable year;
• The taxpayer or a member of the taxpayer's family is enrolled in one or more qualified health plans through a sanctioned Exchange; and
• The taxpayer or a member of the taxpayer's family is not eligible for other qualifying coverage (known as "minimum essential coverage"), such as Medicare, Medicaid, or affordable employer-sponsored coverage.   

New Short Apps for Exchange Coverage under ACA 

The Centers for Medicare & Medicaid Services (CMS) originally posted a 21 page long application for insurance which needed a flowchart to determine eligibility for tax subsidies. Responding to criticism, CMS released 3 new applications: 1) a 5 page individual short form for single adults seeking a tax credit who are not offered health coverage by their employer, do not have any dependents, cannot be claimed as a dependent by someone else, and do not itemize deductions, 2) a 5 page single or family application for anyone not applying for financial assistance, and 3) a 12 page application for anyone in a family seeking tax credits. Applications may be submitted beginning Oct. 1, 2013 for plans that take effect Jan. 1, 2014. The initial open enrollment period will last six months.

For employees who are not eligible for the tax credit, there will also be private exchanges available from the insurance carriers with more extensive plan options. We will be able to assist employees needing to explore the best option for their families.