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Small Business Employee Benefits and HR Blog

Premium Tax Credit MAGI Charts for 2017

Despite the political climate, premium tax credits (sometimes called subsidies) arePremium Tax Credit MAGI Charts for 2017 still available to individuals who don’t receive health insurance through their company or a federal program like Medicaid or Medicare.

Premium tax credits operate on a sliding scale—individuals with a lower modified adjusted gross income (MAGI) receive a larger credit.

Requirements for Eligibility for Premium Tax Credits

Employees may qualify for premium tax credits if:

  • They buy health insurance through the Health Insurance Marketplace.
  • They do not file a tax return using the filing status of Married Filing Separately.
  • They aren’t receiving health insurance through a federal program, such as Medicaid, Medicare, or TRICARE.
  • Their MAGI is within 100 to 400 percent of the federal poverty line for family size.
  • The individual can’t be claimed as a dependent by another person.

You can get more information about eligibility requirements for the premium tax credit on the IRS website.

Percent of Federal Poverty Level (2017) and Income

Wondering whether you’re eligible for premium tax credits in 2017? To determine if you qualify for a premium tax credit, you must first calculate your MAGI. Generally, the lower your household income, the higher premium tax credit you can receive.

Once you’ve finished calculating your MAGI, check it against the chart below to see if you’re eligible.

Family Size

100%

138%

150%

200%

300%

400%

1

$12,060

$16,643

$18,090

$24,120

$36,180

$48,240

2

$16,240

$22,411

$24,360

$32,480

$48,720

$64,960

3

$20,420

$28,180

$30,630

$40,840

$61,260

$81,680

4

$24,600

$33,950

$36,900

$49,200

$73,800

$98,400

Source: U.S. Department of Health and Human Services

You must also find out if your company's health insurance offering qualifies as "affordable," as individuals who participate in a company group policy don’t qualify for a premium tax credit. In 2017, the federal definition of “affordable coverage” is a policy that costs 9.69 percent or less of a person’s household income.

Premium Tax Credit Chart—Examples

The following chart shows how premium tax credits in 2017 might affect the cost of an individual health insurance policy.

Family Size

Annual Income

Estimated Annual Cost of a Silver Plan Without Tax Credit

Annual Premium Tax Credit (2017)

Cost of Health Insurance with Premium Tax Credit

4

$80,000

$11,074

$3,322

$7,752 ($646 per month)

4

$35,000

$11,074

$9,779

$1,295 ($108 per month)

3

$60,000

$8,924

$3,162

$5,761 ($480 per month)

2

$35,000

$6,773

$4,296

$2,477 ($206 per month)

1

$27,000

$3,387

$1,388

$1,998 ($167 per month)

Source: Kaiser Family Foundation Health Insurance Marketplace Calculator

How the Small Business HRA Affects Tax Credits

Remember—if you participate in a Small Business Health Reimbursement Arrangement (HRA), it may affect your eligibility to receive premium tax credits, as affordable health insurance in 2017 is a policy that costs more than 9.69 percent of an employee’s household income.

If you still quality for a premium tax credit because your Small Business HRA does not count as affordable coverage, you must still reduce the amount of your premium tax credit by the amount of your company’s HRA contribution.

Conclusion

The uncertainty surrounding the Affordable Care Act can make it difficult to plan ahead with respect to health insurance coverage, but your 2017 coverage and premium tax credit eligibility will remain unaffected. Check back often for the latest updates.

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Do you have more questions about premium tax credits? Leave a comment.