Obama care question ??...
 

I just got off the phone with my cousin who brought up a question I can't find a clear answer to. She works part time and earns around $15,000 a year.

The policy she is looking at features a monthly premium of $132 with this fine print, "Premium before tax credit $607/month"

My question is this, assuming she qualifies for the entire subsided difference between $607 and $132 how is this difference paid?

Each month she will have an insurance bill of $607, is the $475 difference paid directly to the insurance company by the government? Or does she pay it and get reimbursed? If it's a tax credit that amount is more than what she pays each month in taxes so does she get a check for the difference? I have no idea and she doesn't want to sign up for an amount she obviously can't pay.

Thanks, if you know.


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http://healthinsurance.about.com/od/...bsidy-Work.htm :)

Thanks Tony. Exactly what I was looking for :thumbsup


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Premium vs Tax Credit
 

Unless they've changed things,

A Premium is what you pay on an insurance policy. Just like you pay a yearly premium on your car insurance. You cousin will pay $132 monthly.

A Tax Credit is what you can deduct when you file your taxes. Cousin's credit $607 monthly.

The BS with a Tax Credit is, if you don't have enough income, it's bogus. At $15,000 the cousin may not be paying much in taxes anyway or nothing.

I worked for a small start-up company looking for any help. They got tax credits for hiring "disadvantaged" people. Such as farmers who lost their farm, divorced house wives. there's a a ton of qualifications. But it did the company no help as they were losing money. A big company I worked for scored millions of tax credits for hiring employees who lived in areas ravaged by items such as Hurricane Katrina.

It's an encouragement to hire in areas where businesses might not want to hire. That's how DeLorean ended up building his cars in N Ireland. But for the average, lower income working person it might mean you income tax bill goes down a few $100 if at all.