California health insurance    Health Reform in California    400% of Federal Poverty Level

400% of Federal Poverty Level


RAF and California group health insurance 400% of FPL determines if a person is eligible for subsidy (detail below)
California RAF for Small Group Subsidies can be $1000's of dollars per person per year (detail below)

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 your estimated current year's income?  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.   We'll provide a calculator at the bottom of this article.

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! 

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 2013 400% of Federal Poverty Levels:

 Household Size

 100%

 133%

 150%

200%

250%

 300%

400%

 1

$11,670

$15,521

$17,505

$23,340

$29,175

$35,010

$46,680

 2

15,730

 20,921

23,595

  31,460

39,325

47,190

62,920

 3

19,790

 26,321

29,685

  39,580

49,475

59,370

79,160

 4

23,850

 31,721

35,775

  47,700

59,625

71,550

95,400

 5

27,910

 37,120

41,865

  55,820

69,775

83,730

111,640

 6

31,970

 42,520

47,955

  63,940

79,925

95,910

127,880

 7

36,030

 47,920

54,045

  72,060

90,075

108,090

144,120

 8

40,090

 53,320

60,135

  80,180

100,225

120,270

160,360

 

We can quickly size up what income to look at, what period to consider, and what makes up your household so that you get the most tax credit possible.  Call us at 800-320-6269.

 

 



 

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