Qualify for Premium Tax Credits

In the Health Insurance Marketplace, you may be able to lower the costs of your health insurance coverage by paying lower monthly premiums. You’ll see the amount of savings you’re eligible for when you fill out your Marketplace application. Prices shown for insurance plans will reflect the lower costs.

These lower costs are handled with a tax credit called the Advance Premium Tax Credit. These tax credits can be applied directly to your monthly premiums, so you get the lower costs immediately.

Savings depend on income and family size

The amount you save depends on your household size and how much money your household earns. The Marketplace generally considers your household to be you, your spouse if you’re married, and your tax dependents. Your eligibility for savings is generally based on the income of all household members, even those who don’t need insurance.

In most years, households are only eligible for lower premiums if income falls between 100 percent and 400 percent of the Federal Poverty Level (FPL). However, the American Rescue Plan Act (ARPA) eliminated the 400 percent limit through 2025, so you may be eligible even if your income exceeds 400 percent FPL.

Many Virginians whose household income is under 100 percent FPL may also qualify for coverage. U.S. citizens and some eligible immigrants with earnings below 100 percent FPL qualify for Medicaid. Immigrants who are lawfully residing but ineligible for Medicaid may still enroll in a Marketplace plan even if their income is under 100 percent FPL.

You can find the 2023 Federal Poverty Level guidelines here. A navigator can also help you check your eligibility for Marketplace tax credits and Medicaid/FAMIS coverage.

Modified adjusted gross income

Both the Marketplace and some Medicaid programs calculate income using a method called “Modified Adjusted Gross Income” (MAGI).

MAGI is generally your household’s adjusted gross income plus any tax-exempt Social Security, interest, and foreign income you have. It’s used to determine your eligibility for lower costs on the Marketplace, and for Virginia’s Medicaid/FAMIS health coverage programs.

You don’t have to figure out this income yourself. The math will be done for you when you apply through the Marketplace.

How to estimate your income

When you apply for lower costs on the Marketplace, you’ll need to estimate your household income for the current year. (You should not rely on your prior year’s income to calculate your current earnings, as your income may have changed).

The Marketplace application will prompt you to enter information about the following types of earnings that you might have:

  • Wages
  • Salaries
  • Tips
  • Net income from any self-employment or business
  • Unemployment compensation
  • Social Security payments
  • Rental income
  • Interest, dividends, and capital gains
  • Pensions and annuities
  • Alimony ONLY for divorces finalized before 1/1/2019
  • And certain other income sources