Obamacare: Unmarried couples get subsidies as two separate people

I’ve looked at the subsidy calculator at the Kaiser Family Foundation’s website, and I think my boyfriend and I will be able to get help.  We are not married, but we are domestic partners – “sharing essentials of life”, etc.  Is our household income our two incomes together, or would we apply as two separate single people?  Also, how does the subsidy work?  Would it be an annual-tax-return type credit?  And could we use it to pay our share of the cost of our employer’s plans? 

Almost But Not Quite Married

Dear Almost But Not Quite Married,

Your income will be separated, since you are not married.  Your income will be whatever you earn; his will be whatever he earns.  And you will apply as two single people.

This won’t be a significant disadvantage, however, because the subsidized plans have rates designed per person.  The cost for two adults is two times the single rate, married or not.  There’s no “discount” for being married.

Keep in mind that you can shop for coverage on the exchange only if you have no employer plan offered to you OR the employer plan costs more than 9.5% of your income to join as a single person.  So, if you have a plan from your job, you will not be shopping on the exchange.  (And, you cannot get a government subsidy to pay for an employer plan.  Under health reform, the employer plan cannot cost you more than 9.5% of your income to cover yourself.  There are no rules, however, about how much covering your family can cost.)

Shoppers on the exchange will apply for subsidies and choose a plan.  The exchange will calculate the subsidy, and the federal government will pay the plan directly.  You would not have to come up with the cash during the year, and then get it back when you file your taxes.  If you end up earning more than you estimated, you would pay the feds back whatever subsidy you shouldn’t have received.

So, for example, if you estimate your income for 2013 at $34,000, and you earn $39,000, then your subsidy should have been lower.  You will pay the feds back the difference.  This is similar to how your regular taxes work now.  You either get a refund or have to pay more taxes every April 15th.  The difference is that your subsidy amount could be a lot of money, so estimate your income carefully if you do shop on the exchange.

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Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.