The Basics of Advanced Premium Tax Credits
Advanced premium tax credits (APTCs) are tax credits you can use to help you pay for your health insurance premium. These tax credits are provided in the form of a reduction in premiums paid by an eligible individual enrolled in a Covered California plan. Eligibility for APTC is based on your income, family size, and other factors. If you received financial assistance during 2017 to help pay your insurance premiums, then you received APTCs for the 2017 tax year.
That means if your employer offered you affordable and minimum value coverage, but you turned it down, signed up for an individual plan through Covered California, and received APTCs to help you pay for that plan, you may have to pay back some or all of the APTCs you received in 2017 when you file your taxes this year.
Employees who are offered health coverage by their employers MAY NOT be eligible for APTCs and may have to pay back APTCs they received.
Employees who are offered health coverage by their employer that is affordable and that meets minimum value standards are NOT eligible for tax credits to help pay premiums for an individual Covered California health plan. Employees who are offered affordable and minimum value health coverage by their employer, may decline the employer-based coverage and purchase insurance through Covered California, but at the full cost without tax credits. That means if your employer offered you affordable and minimum value coverage, but you turned it down, signed up for an individual plan through Covered California, and received APTCs to help you pay for that plan, you may have to pay back some or all of the APTCs you received during the year when you file your taxes this year.
Affordable and Minimum Value Coverage
Most health plans offered by employers is affordable and offers minimum value. A health plan meets minimum value requirements if it is designed to pay at least 60% of the total cost of medical services for a standard population and includes substantial coverage of inpatient hospital and physician services. Employees offered job-based coverage that provides minimum value and is considered affordable aren’t eligible for a premium tax credit. Employer insurance is considered affordable under the ACA if the employee’s share of the premium for the lowest priced plan available that would cover the employee only — not the employee’s family — is 9.56% or less of their household income. Employees offered job-based coverage that’s affordable and provides minimum value are not eligible for a premium tax credit if they purchase a plan through Covered California.