The Cost Share Reduction Subsidy

is a key component of the Affordable Care Act.

Purpose:
    To help covered individuals and families with the out of pocket expense when they access care.

How Does Someone Qualify?

• Household income must be between 100% - 250% of the Federal Poverty Level.(FPL)
  
• Covered individuals must be legally present in the USA.
  
• Covered individuals must not be eligible for Medicare or Medicaid.
  
• Covered individuals must not be eligible for employer sponsored affordable healthcare coverage. This appears to give incentive for small businesses with employees in lower income bracket to drop coverage and have employees go on their own. We have a strategy for this situation to help both the employer and employee.
  

For 2014 under the Affordable Care Act the maximum out of pocket limit is: $6,250 for a single and $12,500 for a family. this is where the Cost Sharing Reduction kicks in.The level of  reduction in the out of pocket limit is based on income level.                                   

Example:
    This example is an approximation.

• 100-200% of Federal Poverty Level                     the reduction in the out of pocket is by 66%
  
• 200-300% of FPL                                                the reduction in the out of pocket is by 50%
  
• 300-400% of FPL                                                the reduction in the out of pocket is by 33%
  

The maximum out of pocket limit is reduced by the percentages you see above.

If you fall into the 200-300 of FPL category you would qualify for a 50% reduction.
This would mean the maximum you would pay out of your pocket for co-pays and deductibles would be $3,125 for a single or $6,250 for a family.

The Cost Sharing Subsidy is a key component in the new Affordable Care Act to help making healthcare affordable.

Regards,
Vincent