Individuals who purchased their plans from the official exchanges might want to look into their tax credits.
Among the primary draws of purchasing health insurance through the state and federal exchanges was the opportunity to take advantage of the premium tax credit, but it is important for consumers to make sure that they continue to qualify for this advantage.
Eligibility criteria could have changed since the time at which the health plan was first purchased.
The health insurance tax credit was put into place to make sure that people with moderate incomes would be able to find the coverage to be more affordable. In order to qualify, the plans had to be purchased through an exchange by an individual (not through a government or employer plan), the household income must be within a certain specific range, tax filing must be done in any way other than Married Filing Separately (though there is a limited exception in that circumstance) and it cannot be for an individual who is being claimed by someone else as a dependent.
While those health insurance tax credit criteria could have been met at the start of the year, this may have changed for some.
When eligible for the tax credit, it means that monthly premiums will be lower because that credit is paid directly to the insurance company. However, situations can change as time passes, and now that the mid-year period has arrived, many policyholders are starting to discover that it would have been wise to have a look at their circumstances, as there are a number of things that can cause eligibility to change.
Some of the situations that can lead to a change in eligibility can include common circumstances such as marriage or divorce, change in the size of the family, moving to a new residence, new coverage through an employer or somewhere else, or an increase or decrease in overall income.
The insurance industry is cautioning consumers to be aware of their changes in circumstance to ensure that the proper premium tax credit is being paid to the insurer. Should too much money be paid throughout the year, it could mean that individuals could end up receiving a smaller tax refund when they file next year, as that money will be used to pay back the coverage. Should too little be paid in tax credits, then health insurance premiums may be too high until it is corrected.