Financial Help FAQs
What kind of financial help is available through Vermont Health Connect?
Advance Premium Tax Credits (APTC): If you purchase a health plan through Vermont Health Connect, you may qualify for an income-based tax credit through the federal government. This tax credit will help you pay for part of your monthly premiums. You can choose to apply your tax credit to your monthly premiums or you can get it all at once when you file your federal income taxes. If you make more money during the year than you expected to when you applied for financial help, you may have to pay some of your tax credit back. To avoid this, call Vermont Health Connect to report any changes of income throughout the year.
Cost-sharing reductions (CSR): If your household income is less than 300% of the federal poverty level (FPL), you may be eligible for help to reduce your out-of-pocket medical expenses. In order to qualify for these cost-sharing reductions, you must purchase a silver-level plan through Vermont Health Connect. To find out how your income compares to FPL, view the FPL chart.
What is APTC exhaustion?
Advance Premium Tax Credits (APTC) are an income-based form of financial help you can get from the federal government. The program is run by the Internal Revenue Service (IRS). After you send your taxes to the IRS at the end of the year, they will compare the money you actually earned to the money you estimated you would earn when you signed up for Vermont Health Connect. If you earned more money than you said you were going to earn, you may have to pay back some of your financial help.
To avoid this, you should report any changes of income to Vermont Health Connect promptly. If you have an increase in income, this will likely reduce the amount of APTC you’re qualified for—which means you may pay more each month towards your premium.
If you experience an increase in your income, this will reduce the amount of APTC you can get on an annual basis. If you’ve been getting APTC all year at a higher rate, you could run out of the total amount of APTC you can get during the year after you declare a change in income. This is called “APTC exhaustion”.
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 12 months 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 has already spent in APTC this year. 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 without having to pay any of it back at the end of the year when he files his taxes.
Are special benefits available for Native Americans?
Under the Affordable Care Act, members of federally recognized tribes are eligible for special benefits, including no cost-sharing for those under 300% of the federal poverty level (FPL). Enrollment for this program is year-round. Check with tribal leadership if you are unsure whether your tribe is federally recognized.
If I make more money than I estimated, will I have to pay back the financial help I received?
Depending on the type of financial help you got, you may have to pay some, or all, of it back at the end of the year. Usually, this happens because you made more money during the year than you estimated on your VHC application.
Unlike Cost Sharing Reductions (CSR), Advance Premium Tax Credits (APTC) may need to be repaid. Because the APTC program is run by the Internal Revenue Service (IRS), your actual income will be checked against your estimated income at the end of the year when you file your taxes. If you made more money during the year than you estimated on your application, you may have to pay some, or all, of your advanced premium tax credits back when you file your federal taxes. To avoid this, call Vermont Health Connect to report any changes of income throughout the year.