the formula to find out if you qualify for a subsidy on the health insurance exchanges seems complicated but it is actually quite simple. let’s walk through it. the subsidy calculation is based on your income and the average cost of certain health plans on the exchange. subsidies are only available to those who earn between 100% and 400% of the federal poverty level (fpl). in 2013 the fpl is $11 490 for one person and $23 550 for a family of four. the amount of subsidy you receive depends upon where your income falls between the 100% and 400% fpl range. for example if your income is 100% fpl you are only responsible for the amount of monthly premiums that equals 2% of your income. anything above that dollar amount is considered your subsidy. below is the chart from 100-400% fpl of how much of your income you will have to pay towards your monthly premiums on the exchange. these percentages of income are not your subsidy; they are your contribution. the subsidy is calculated per individual or family based upon the dollar amount that goes over this contribution. income amount of income responsible for in premiums 100-133% fpl 2% of income 133-150% fpl 3 – 4% of income 150-200% fpl 4 – 6. 3% of income 200-250% fpl 6. 3 – 8. 05% of income 250-300% fpl 8. 05 – 9. 5% of income 300-400% fpl 9. 5% of income also beginning on january 1 2015 if your employer offers health insurance but your portion of the monthly premiums in your employer-based plan cost 9. 5% or more of your income you are eligible for subsidies on the exchange.
how is income used to calculate subsidy eligibility in the health insurance exchanges?