Cross References
- IRC §36B
- Notice 2013-45

Effective for 2014, all non-exempt U.S. citizens and legal residents are required to have health insurance (minimum essential coverage), or face paying a penalty tax when filing their 2014 tax return. To help individuals and families obtain health insurance, the Health Care Reform Act provides for a premium assistance credit designed to help individuals and families afford the cost of health care.

In general, if household income is at 100% of the federal poverty level, the credit is designed to reimburse the insurance company so that the amount billed to the participant does not exceed 2% of household income. If household income is at 400% of the federal poverty level (over $94,000 for a family of four in 2014), the credit is designed to reimburse the insurance company so that the amount billed to the participant does not exceed 9.5% of household income. If household income is between 100% and 400% of the federal poverty level, the credit will be adjusted to an amount that allows the participant to pay between 2% and 9.5% of household income for the cost of health insurance. Individuals below 100% of the federal poverty level qualify for Medicaid and thus do not need the credit to help pay for insurance.

See printable version for a table outlining the premium assistance levels and for the remainder of the article.