What are Federal Poverty Levels Used for?
Federal Poverty Levels (which are also called Federal Poverty Guidelines, federal Poverty Line or simply FPL) are used to see if you qualify for cost assistance when buying insurance through your State Health Insurance Marketplace.
They are also used to see if you are eligible for Medicaid (though this depends on rules adopted by your State), give exemptions from the requirement to purchase insurance, or to see if you will have to pay some of the Affordable Care Act’s taxes on higher earners.
As a rule of thumb if your family income is less than four times the published Federal Poverty Guideline (400% of FPL) for your household size, and you are not eligible for employer or other public assisted healthcare (such as Medicaid or Medicare), you will be able to receive premium subsidies to help you purchase affordable insurance through your State’s Health Insurance Marketplace. Although technically a “tax credit” which you will receive when you file your 2014 tax return, a tax credit advance will be paid directly to the insurance provider you choose, reducing the monthly premium you have to pay. If at the end of the year your income turns out to be more or less than expected the tax credit will be adjusted and added to or taken from any tax refund or payment due.
• If you make less than four times (400% of the FPL) you may qualify for reduced premiums through the marketplace due to advanced premium tax credits.
• If your income is below two and a half times (250%) the FPL you qualify for a policy with reduced deductibles, copayments and lower maximum out of pocket costs.
• If you live in a State that has agreed to expand Medicaid, and your household income is up to 138% of the relevant FPL you probably qualify for Medicaid. In State’s that don’t expand Medicaid the threshold is between 100%-133% although many more restrictions apply to eligibility aside from income.
Each year Obamacare premium subsidies, cost assistance and taxes will be based on the Federal Poverty Level Guidelines at the start of the open enrollment period (Nov 15 2014 for 2015). So premium subsidies, cost-sharing assistance, and taxes for 2015 are based on the 2014 Federal Poverty Guidelines.
How Do the Federal Poverty Levels Work?
Federal Poverty Guidelines depend on the total number of persons in the household. For healthcare purposes the same figures are used in the 48 contiguous states and in the District of Columbia, while higher values (reflecting higher living expenses) apply to Hawaii and Alaska. The 100% column shows the federal poverty guideline for each family size, and the percentage columns that follow represent income levels that are commonly used to determine health care costs for health programs like the Affordable Care Act.
2014 Federal Poverty Guidelines for 48 Contiguous States and DC
Federal Poverty Guidelines Used to Calculate Premiums, Cost-Assistance and Taxes in 2014 – 2015. These are the most recent guidelines and will be used to calculate cost assistance for this years open enrollment Nov 15, 2014 – Feb 15, 2015:
|Federal Poverty Guidelines 2014|
|Persons in Household||2014 Federal Poverty Level for Continental U.S.||Medicaid Eligibility (138% of FPL)||Premium subsidy threshold (400% of FPL)|
|Persons in family/household||Poverty guideline|
|For families/households with more than 8 persons, add $5,080 for each additional person.|
|Persons in family/household||Poverty guideline|
|For families/households with more than 8 persons, add $4,670 for each additional person.|
2013 Federal Poverty Guidelines for 48 Contiguous States and DC
Federal Poverty Guidelines Used to Calculate Premiums, Cost-Assistance and Taxes in 2013 – 2014:
|For each additional person, add||$4,020||$5,347||$5,548||$6,030||$8,040||$12,060||$16,080|
2013 Federal Poverty Guidelines for Alaska
|For each additional person, add||$5,030||$6,690||$6,941||$7,545||$10,060||$15,090||$20,120|
2013 Federal Poverty Guidelines for Hawaii
|For each additional person, add||$4,620||$6,145||$6,376||$6,930||$9,240||$13,860||$18,480|
What Do They Mean By “Household Size”?
For most families it is yourself plus the number of people that you claim as dependents on your income tax return. This may include children, parents, or other relatives who qualify as dependents on your tax return. Children of divorced parents are counted as the family of the parent who claims them as a dependent (even if the other parent has to pay for the child’s health insurance). Do not include children who earn enough to support themselves, and so are no longer eligible as dependents, even if they still live at home.
What Does Income Include?
Expected 2014 gross income (before taxes) including wages, tips, net profit from self-employment, interest, rental income, and other investment income, most pensions, social security payments and alimony. This will be the amount called “Modified Adjusted Gross Income” shown on your tax return in line 4 of Form 1040EZ, line 21 of 1040A or line 37 of form 1040. If your only income is from a job it is the number shown in box 1 of your W2 form. Include income of all dependents (for example a child’s summer earnings or dependent’s social security) even if they filed a separate tax return.
Federal Poverty Guideline Facts
Obamacare uses the 2013 Federal Poverty Guideline values, published in January 2013, for the whole of 2014. The official Federal Poverty Level Guidelines are released each January and based on the “Federal Poverty Threshold” data for the previous year. The FPL guidelines will be updated yearly.
What are Federal Poverty Thresholds?
The poverty thresholds are the original version of the federal poverty measure. They are updated each year by the Census Bureau. The thresholds are used mainly for statistical purposes — for instance, preparing estimates of the number of Americans in poverty each year. (In other words, all official poverty population statistics are calculated using the poverty thresholds, not the guidelines.)
You will use the Federal Poverty Level Guidelines to calculate your cost assistance on the health insurance marketplace.
What are Federal Poverty Guidelines?
The Federal Poverty Guidelines a simplification of the poverty thresholds for use for administrative purposes — for instance, determining financial eligibility for certain federal programs. They are issued in January of each year in the Federal Register by the Department of Health and Human Services (HHS).
What Is the Federal Poverty Level for 2014 – 2015?