400% of Federal Poverty Level and California Health Subsidy
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Dennis Jarvis
May 11, 2013, 5:24:03 AM5/11/13
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Please consider this free-reprint article written by:
Dennis Jarvis
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Article Title: 400% of Federal Poverty Level and California Health Subsidy
Author: Dennis Jarvis
Word Count: 518
Article URL: http://www.isnare.com/?aid=1837230&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=1837230
Easy Publish Tool: http://www.isnare.com/html.php?aid=1837230
*********************** ARTICLE START ***********************
This is the number you really need to know going forward into the 2014 Health Reform changes. Are you under 400% of the Federal Poverty Level for the year of 2012 (tax filing of April 2013)? That lone fact will dictate whether you receive sizable California health insurance subsidies or whether you pay much higher premiums than prior to Jan 2014. We are talking about billions of dollars flowing to and from (through taxes) millions of people. Let's check out the 400% Federal Poverty limits and also really understand what's at stake.
Why 400% of the Federal Poverty Level?
The ACA bill sets 400% of the FPL as the dividing line between those that will qualify for a subsidy and those that will not. If your MAGI (Modified Adjusted Gross Income...think both active and passive income) is under 400% of the the FPL number, you may qualify for subsidy. The subsidy is based on keeping your share of health insurance premium below a certain amount (9.5% at the most) of your income. For example, if you make 350% of the FPL and your premium is $1000 with an income of $3,000 monthly, you may receive a subsidy of approximately $700. Your net premium in this simplified example would be $300/monthly of the original $1000.
What if you make over 400% of the FPL?
You receive no subsidy. It's a very steep line...there is no gradual scale but a drop off and those making over 400% of poverty can expect health insurance premiums to be quite a bit more expensive. This is why the 400% rate is so important. It's literally the difference between $1000 of dollars in health subsidies versus none. We expect to have two distinct camps of health care shoppers...those with a subsidy (pleased) and those without (irate). It's going to be an interesting 12 months in the California health insurance market! So why does the 2012 FPL matter?
The Federal Poverty Look Back Period
To qualify for the health subsidy, income will be the primary basis. The only official settling of income is the Federal tax return. Since the subsidy is slated to start being advanced Jan 1st, 2014, the most recent tax filing is April 2013 which reflects income levels from 2012. The FPL numbers go up each year with an inflation index so we really need to look at 2012 numbers for a Jan 2014 eligibility. Similarly, eligibility for 2015 (will need to be re-qualifed each year) will be based on 2013 numbers (tax filing in April, 2014) and so on. What happens if your income changes significantly during the period that you are receiving the advanced subsidy?
Settlement of subsidies received
If your income goes up significantly during the year that you are receiving the health subsidy, you may have to pay back part of the advanced subsidy as part of your tax filing in the following year. the amount to be paid back is based on your % of FPL and the amount you received. People who still make under a certain level will not need to pay back the full amount they had received. Here are the 2012 400% of Federal Poverty Levels.
About The Author: Dennis Jarvis is a licensed California health insurance agent with extensive knowledge of the Individual and Small Group California health insurance market. http://www.calhealth.net
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=1837230
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
Message delivered directly to members of the group:
publish-the...@googlegroups.com
*****************************************************************
Please consider this free-reprint article written by:
Dennis Jarvis
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=1837230
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=1837230
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: 400% of Federal Poverty Level and California Health Subsidy
Author: Dennis Jarvis
Word Count: 518
Article URL: http://www.isnare.com/?aid=1837230&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=1837230
Easy Publish Tool: http://www.isnare.com/html.php?aid=1837230
*********************** ARTICLE START ***********************
This is the number you really need to know going forward into the 2014 Health Reform changes. Are you under 400% of the Federal Poverty Level for the year of 2012 (tax filing of April 2013)? That lone fact will dictate whether you receive sizable California health insurance subsidies or whether you pay much higher premiums than prior to Jan 2014. We are talking about billions of dollars flowing to and from (through taxes) millions of people. Let's check out the 400% Federal Poverty limits and also really understand what's at stake.
Why 400% of the Federal Poverty Level?
The ACA bill sets 400% of the FPL as the dividing line between those that will qualify for a subsidy and those that will not. If your MAGI (Modified Adjusted Gross Income...think both active and passive income) is under 400% of the the FPL number, you may qualify for subsidy. The subsidy is based on keeping your share of health insurance premium below a certain amount (9.5% at the most) of your income. For example, if you make 350% of the FPL and your premium is $1000 with an income of $3,000 monthly, you may receive a subsidy of approximately $700. Your net premium in this simplified example would be $300/monthly of the original $1000.
What if you make over 400% of the FPL?
You receive no subsidy. It's a very steep line...there is no gradual scale but a drop off and those making over 400% of poverty can expect health insurance premiums to be quite a bit more expensive. This is why the 400% rate is so important. It's literally the difference between $1000 of dollars in health subsidies versus none. We expect to have two distinct camps of health care shoppers...those with a subsidy (pleased) and those without (irate). It's going to be an interesting 12 months in the California health insurance market! So why does the 2012 FPL matter?
The Federal Poverty Look Back Period
To qualify for the health subsidy, income will be the primary basis. The only official settling of income is the Federal tax return. Since the subsidy is slated to start being advanced Jan 1st, 2014, the most recent tax filing is April 2013 which reflects income levels from 2012. The FPL numbers go up each year with an inflation index so we really need to look at 2012 numbers for a Jan 2014 eligibility. Similarly, eligibility for 2015 (will need to be re-qualifed each year) will be based on 2013 numbers (tax filing in April, 2014) and so on. What happens if your income changes significantly during the period that you are receiving the advanced subsidy?
Settlement of subsidies received
If your income goes up significantly during the year that you are receiving the health subsidy, you may have to pay back part of the advanced subsidy as part of your tax filing in the following year. the amount to be paid back is based on your % of FPL and the amount you received. People who still make under a certain level will not need to pay back the full amount they had received. Here are the 2012 400% of Federal Poverty Levels.
About The Author: Dennis Jarvis is a licensed California health insurance agent with extensive knowledge of the Individual and Small Group California health insurance market. http://www.calhealth.net
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=1837230
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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