Advanced Premium Tax Credits, or APTC, is a form of financial help you can get if your income is below 400% of the Federal Poverty Level (FPL). Click here for a chart of FPL levels for the current year.
The APTC program is run by the federal government and administered by the IRS. It’s important to report any changes of income you have (outside of Open Enrollment) because your estimated income will be compared to your actual income when you file your taxes at the end of each year. If you made more money than you estimated you would, you may have to pay back some of your APTC when you file your taxes.
If you’ve been receiving APTC and report a change of income to Vermont Health Connect mid-year, it’s likely that the amount of APTC you can get will change. This can sometimes result in something called “APTC exhaustion.” APTC exhaustion happens when your income increases and your yearly APTC amount is reduced. The amount of APTC you’ve used so far is subtracted from your adjusted yearly APTC bank, and that can change the amount of monthly APTC you receive.
Here’s an example of how it works:
During the last Open Enrollment period, Jim signed up for coverage through Vermont Health Connect. Based on his income at that time, he received $500 per month in APTC. After six months, Jim got a big raise. He called to report his change of income to Vermont Health Connect, and his APTC went down to $400 per month. He multiplied his new APTC amount of $400 by his 12 months of coverage to find his adjusted yearly APTC bank of $4,800.
Since Jim’s income from January to June made him eligible for APTC at a higher rate, he multiplied his previous APTC rate of $500 by 6 months to find out what he had already spent in APTC this year ($500 per month times 6 months equals $3,000). Now that Jim knows that he has already spent $3,000 of his total yearly APTC, he can subtract that from his adjusted yearly APTC bank of $4,800 to find out what he has left to spend.
Jim subtracted the $3,000 he has already spent in APTC from his adjusted yearly APTC bank of $4,800—leaving him with $1,800 to spend for the remaining six months of the year. Jim then divided that $1,800 by six months to get a monthly APTC amount of $300. This is the maximum monthly APTC he can use. Any additional income changes during the year will impact his adjusted yearly APTC bank.
For questions about reporting changes of income and APTC exhaustion, please call our Customer Service Center at 1-855-899-9600, or speak with an in-person assister.