Advance Premium Tax Credit - Massachusetts Health Connector

What to Know If You Get Help Paying for Health Insurance from Both the Health Connector and Your Employer

Overview A Health Reimbursement Arrangement, or HRA, is an employee health benefit from your employer that reimburses you for your health care expenses up to a certain dollar amount. There are several types of HRAs. This page focuses on two types: Individual Coverage HRAs (ICHRAs) and Qualified Small Employer HRAs (QSEHRAs).If you are offered one of these types of HRAs, you should have received a clear notice from your employer explaining the terms of the Individual Coverage HRA or the QSEHRA. The type of HRA will appear prominently on that notice.If your employer offers an Individual Coverage HRA or a QSEHRA instead of a traditional employer health insurance plan, you can use it to help pay your monthly premiums for a health plan purchased through the Health Connector. However, these types of HRAs might affect your tax credit eligibility. When completing the Health Connector application for health coverage, be sure to enter any information about your individual coverage HRA or QSEHRA from your employer. The Health Connector’s application includes questions about employer offered HRAs and uses this information to determine your eligibility for tax credits through the Health Connector.Keep your application information up to date. If your income changes, you should update the information you gave us about your expected income in your application. If your employer stops offering an Individual Coverage HRA or a QSEHRA, you should update your application since that may affect your tax credit eligibility.You can read more below about Individual Coverage HRAs and QSEHRAs. [...]

Your coverage end date and renewing your coverage

When you buy health and dental insurance through the Health Connector, your coverage period ends on December 31 regardless of your coverage start date. But, don’t worry. You have the opportunity to review coverage each year during the Open Enrollment period. Before your coverage end date for the year, you will get letters in the mail that will let you know about your coverage options for the next year. Your plan renewal information will tell you if your plan will be available for the next year, or, if it is not, will give your information about the new plan you are matched to. During open enrollment you can shop for a different plan, even if the plan you have is available. By shopping during open enrollment, you may be able to find plans with lower costs. If your plan is available for the next year and you do not want to change it, then all you have to do is continue to pay your monthly premium. About plan premiums It is important to know that plan premiums change each year. Premiums are calculated based on The ages of covered household members, The number of people covered on the plan, Where you live, and Rates set by health insurers, approved by the Massachusetts Division of Insurance If you are eligible for savings that help lower your monthly premium cost, this may change, too. For example, if you are eligible for an Advance Premium Tax Credit, how much you are eligible [...]

What if my income changes during the year? How will that affect my eligibility for a tax credit?

It’s common for income to change throughout the year, particularly if you are self-employed, have a seasonal job, or more than one job. To get the most accurate tax credit amount, you should let the Health Connector know if you have any income changes during the year, as they happen. If you expect your income to go up during the year, you may want to consider changing the amount of tax credit that you apply to your monthly premiums, so that you take less than the full amount available to you. If you use your tax credit during the year and your actual income is over the amount that makes you eligible, you may need to pay back some or all of the credit. You always have the option of waiting until you file your taxes next year to take the credit on your tax return, instead of applying it to your premiums in advance. This may make sense for you if you aren’t sure what your income will be for the year, and are concerned about having to pay money back at tax time.

Do I have to buy through the Health Connector if I want to get help paying for insurance?

Yes, help paying for insurance through tax credits and low-cost ConnectorCare plans is only available through the Health Connector. Even if you enroll in a plan without help paying for it through the Health Connector, if you end up qualifying for a tax credit based on your income for that year, the IRS will let you to claim the tax credit when you file your taxes at the end of the year. But the tax credit is not available for someone who buys a plan outside of the Health Connector. You can also apply through the Health Connector website to see if you qualify for MassHealth coverage.

Can I get help paying for my health insurance if I buy a plan outside the Health Connector?

No. You can’t qualify for help paying for a health insurance plan with an Advance Premium Tax Credit if you bought it outside of the Health Connector, such as directly with a carrier.

What is an Advance Premium Tax Credit (APTC)?

An Advance Premium Tax Credit (APTC) is money from the federal government that helps lower the cost of your health insurance. It goes straight to your insurance company each month. That means you pay less for your monthly premium.You do not have to wait until tax time to get this help. If you qualify, you can use the tax credit right away to make your plan more affordable.How APTC lowers your monthly costWhen you enroll in a plan through the Health Connector, you can choose how much of your tax credit to use each month. Here is how it works:The tax credit is sent directly to your insurance company.The credit is applied to your monthly premium.You pay less out of your own pocket.Your APTC is based on an estimateYour APTC amount is based on the income you tell us when you apply. Because it uses the income you expect to earn, it is an estimate.Real life changes, though. Your actual income for the year is often a little higher or lower than what you first reported. That is normal.Your final tax credit is set at tax timeThe government does not decide your final tax credit until you file your federal taxes for the year. That final number is based on your actual income for the whole year.When you file, the government compares two things:The amount of APTC you used during the year.The amount you actually qualified for.This comparison decides whether your advance credit was the right amount.What this means for [...]