Most people shopping for health insurance through the Obamacare Marketplace will be eligible for financial assistance—called the Premium Tax Credit—to help them cover the cost of insurance.  We’re talking real help—the average amount of financial assistance per family is estimated to be $5,290.    Time is running out to sign up this year—the deadline to get started is next Monday, March 31!   Read on to get answers to some commonly asked questions about the Premium Tax Credit—and then dash on over to healthcare.gov or call (800) 318-2596 and get started on your application today!

Am I eligible? 

There are three basic eligibility requirements for the Premium Tax Credit:

1. Your income must be between 100%-400% of the federal poverty line (for a family of four, that’s an income between $23,550 and $94,200).
2. You must buy health insurance through the Marketplace (sometimes called Exchange)—either by visiting www.healthcare.gov or calling (800) 318-2596.
3. To receive the Premium Tax Credit, you can’t be eligible for other health insurance coverage—either through another government program like Medicaid or Medicare, or through your employer.

How much financial assistance is available (read: how much will I pay)?

When you shop for health insurance through the Marketplace, you’ll enter information about your family size, household income, and eligibility for other insurance.  The Marketplace will use that information to determine whether you qualify for the Premium Tax Credit—and if you qualify, how much assistance is available to you.  (Are you itching to find out right now?  Use this quick and easy subsidy calculator.)

The amount of financial assistance that you receive is based on a sliding scale—the lower a family’s income is, the larger the tax credit will be.

A tax credit for all seasons?

Yes!  Unlike other tax credits that you get at tax time every year, the Premium Tax Credit is available as soon as you sign up for health insurance.  Once you sign up, your insurance company will receive the tax credit on a monthly basis—spring, summer, winter, fall—this tax credit will last through all!  (Yep, I just made a little rhyme.  My 18 month old would be proud.)  You’ll be responsible for making up the difference between the actual cost of the insurance and the amount of your Premium Tax Credit.

Here’s an example: Maria, her husband John, and their five year old twins have a household income of $31,000 and want to purchase health insurance.  At this income level, the family will contribute no more than 2% of their annual income—or about $600—toward their health insurance premium.  The total annual premium for a benchmark health insurance plan that covers all 4 of them in their area is $11,000 ($917/month).  Therefore their annual Premium Tax Credit is worth $10,400 ($11,000-their contribution of $600), or $866 a month.  Every month, their insurer will be paid the $866 Premium Tax Credit directly, and Maria and John will be responsible for paying the insurer the remaining $51 a month.  Bottom line: Maria and her family will have quality health insurance, and will pay only $51 a month!

One more thing to know before you go (and it’s important!)

Premium Tax Credits paid directly to your insurer will be based on your projected annual income (how much you think you will make) and household size for 2014.  If there are changes to your family’s income or household size (such as through marriage, divorce, or the birth or adoption of a child) throughout the year, you should report those changes to the Marketplace ASAP, so that an adjustment to your Premium Tax Credit can be made.  If your family’s income goes down or your household size goes up during the year, you may be eligible for a bigger Premium Tax Credit.  If your family’s income increases or your household size goes down, you should report it so that your Premium Tax Credit amount can be lowered, and you can avoid owing that money back when you file your taxes.  You should also tell the Marketplace if you begin receiving health insurance through your employer or become eligible for Medicaid or Medicare part-way through the year to avoid paying back a portion of the Premium Tax Credit.

So now that you know about the Premium Tax Credit and how it will help you pay for health insurance, what are you waiting for?  Go to www.healthcare.gov or call (800) 318-2596 TODAY to find out if you qualify and get covered—don’t wait one more second!  (No really, don’t—the clock is ticking down to the deadline on Monday, March 31!)