Benefits Buzz

Now or Later? Federal Poverty Levels as Factor in Determining ACA Subsidies

Posted on January 29th, 2014

The U.S. Department of Health and Human Services (HHS) published the 2014 Federal Poverty Levels (FPL) last week. The 2014 FPL guidelines have been raised 1.5% in comparison to the 2013 FPL. The FPL is a measure of income used to determine eligibility for various government programs including healthcare, housing and food stamps. The FPL is also used as part of the Affordable Care Act (ACA) to determine eligibility for subsidies available through the Health Insurance Marketplace, also known as the Exchange.

It has since been reported that the 2014 FPL guidelines will not be used to make subsidy determinations until the next open enrollment period takes place later this fall, which will occur between November 15, 2014 and January 15, 2015. Until that time the 2013 FPL guidelines are expected to be used to make subsidy determinations. It appears that Exchanges will use the prior year FPL guidelines to make subsidy determinations moving forward unless new FPL guidelines are made available much earlier in the year.

Key Things to Point Out

  • Individuals earning up to 138% of the FPL may be eligible for Medicaid in certain states.
  • Individuals earning up to 250% of the FPL may be eligible for cost sharing subsidies to reduce their out-of-pocket expenses if they purchase a Silver plan on the Exchange.
  • Individuals earning up to 400% of the FPL may be eligible for the Advanced Premium Tax Credit, also known as a premium subsidy, to help reduce the premium of a health plan purchased on the Exchange.

Note: Income is only one of the factors used to determine eligibility for subsidies in the Exchange.

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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice.


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