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What is a Health Care Subsidy?

Under the new health care law, otherwise known as Obamacare, most Americans will be required to have health insurance starting in 2014.

So what does that mean to you? If you already have health insurance through your employer, not much will change.

But what if you don’t have insurance? To help pay for the cost of health insurance, you may be eligible for financial assistance from the government, called a subsidy.

What is a subsidy?

A health care subsidy is financial assistance from the government that you could be eligible for to help you pay for health insurance. Your eligibility is generally determined by your household income and family size.  To see if you’re eligible for a subsidy, check out this health care calculator.

Quick Tip:  Even though the IRS will report your income to exchanges for you,  if you used TurboTax to prepare your taxes, you can look up your 2012 income on your tax return by logging into My TurboTax or looking at your saved PDF file.

How to apply for your subsidy?

You  can apply for your subsidy when you purchase health insurance through online federal or state health care marketplaces.  The name of the online health care marketplaces are different in each state.  To look up the name of the Marketplace in your state, click here.

How does the subsidy work?

The subsidy will go directly to your health insurance provider when you purchase insurance to lower your monthly health insurance payments or premiums.

Have specific questions about how this impacts you?  Ask them below or get health care reform answers in our TurboTax community.