When health care reform goes into effect in 2014, people under a certain income threshold will qualify for subsidies in the form of tax credits to help offset the price of health insurance, if they buy a plan through an exchange. Individuals whose earnings are less than about $46,000 per year will benefit from the financial assistance. It’s important to be aware that income specifically, not assets, is included in calculating whether an individual will qualify for a subsidy or not.
The types of income that count are:
- Salary/ wages/ earnings from owning a business
- Unemployment insurance
- Social Security income
- Funds pulled from retirement accounts
- Rental income
This is significant for retirees and others who have a large amount of money in retirement or other accounts. As long as the money withdrawn from accounts like these (along with all other income) totals less than $46,000 yearly, a subsidy will still be provided.