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Eligible for a Tax Credit or Subsidy to Help Pay for Health Insurance?

By November 19, 2018August 28th, 2023Health Insurance

If you’re shopping for an individual or family health plan on Pennsylvania’s state-based Health Insurance Marketplace called Pennie, you don’t want to pay more than you have to. Did you know you may be eligible for a health care premium tax credit from the federal government to help pay your monthly premium or out-of-pocket costs?

What Is a Tax Credit/Health Insurance Subsidy?

Financial assistance is available to eligible applicants in the form of a tax credit, also known as a subsidy. You can choose to have your tax credit paid directly to your health insurance company, so you get the savings right away.

There are two types of tax credits to help you pay for your health insurance if you are eligible.

  • Premium tax credit: Lowers your monthly premium by paying a portion of the monthly cost of your health insurance premium.
  • Cost-sharing subsidy: Lowers your monthly premium and helps you pay your out-of-pocket costs when you need care (for example, your copay when you see a doctor or visit a hospital).

Do I Qualify for a Tax Credit or Subsidy?

How much income you and your family make, your age(s), where you live, and your household size determine if you are eligible for a tax credit. Use our ACA subsidy calculator to see if you qualify.

Note: You must live in Bucks, Chester, Delaware, Montgomery, or Philadelphia county to use this tool.

More Important Information about Tax Credits

Here are some important notes to remember about tax credits and subsidies:

  • You can only qualify for a premium tax credit if you purchase a health insurance plan on Pennie.
  • To be eligible for a cost-sharing subsidy, you must enroll in a Silver health plan.
  • Tax credits and subsidies are not available to those who are eligible for a government-sponsored program (like Medicare or Medicaid), or those who have access to an affordable employer-sponsored health plan.*
  • If your household income is different than what you estimated, you will be responsible to pay the difference (if you make more than estimated) or will receive a refund (if you make less than estimated) on your tax return.

*An employer-sponsored health plan is considered affordable if it covers at least 60 percent of required benefits, or if the employee’s share of the premium does not exceed 9.5 percent of the employee’s income.


IBX Insights Team

The IBX Insights Team is here to provide tips on using your health insurance and living a healthy life.