Tax Break Can Help With Health Coverage, But There's A Catch

Tax credits may help make health insurance more affordable, but can bite back if your income goes up more than expected.

There are two kinds of financial help for people planning to enroll in the online health insurance marketplaces that will open this fall. One could put people at risk of having to pay some of the money back, while the other won't.

That's one big difference between tax credits and subsidies, both of which are intended to help people with lower incomes pay for health insurance through the new health care law.

People with incomes between 100 and 400 percent of the federal poverty level ($11,490 to $45,960 for individuals in 2013) may be eligible for tax credits to reduce the cost of their monthly health insurance premiums.

In addition, people with incomes between 100 and 250 percent of the poverty level ($11,490 to $28,725) may qualify for cost-sharing subsidies that will bring down their deductibles, copayments and coinsurance. The subsidies also reduce the maximum amount they can be required to pay out of pocket annually for medical care.

Instead of waiting until tax time to claim the credit for the premiums on their return, people can apply to get it in advance, based on their estimated income for 2014. In that case, the state health exchange, or marketplace, will estimate the tax credit and send it directly to the insurer.

But there's a catch. When April 15 rolls around, the Internal Revenue Service will reconcile the amount of the advance payments sent to the insurer with the taxpayer's actual income. If a person's income is higher than the estimate, the taxpayer will have to repay the difference.

But there's some good news, too. If a person's income is lower than estimated, the taxpayer will get a credit.

People who quality for the cost-sharing subsidies won't face the same financial risk. The federal subsidies, which reduce consumers' out-of-pocket costs, will be paid directly to insurers. They could cover thousands of dollars of costs, depending on a person's health care usage.

But with the subsidies, if a person's income changes during the year, he or she won't be responsible for any extra costs.

"It's not a reconcilable tax credit, so consumers aren't on the hook if their income changes," says Christine Monahan, a senior health policy analyst at Georgetown Health Policy Institute's Center on Health Insurance Reforms.

So check out both options for cheaper premiums, but be well aware of the differences.

An App That Lets You Play a Virtual Game of Catch

Image: Joe Doucet Studio

Joe Doucet was grabbing a cup of coffee at his local shop when a common sight caught him off guard. “Everyone sitting down had this bent-over posture staring into their phone. Everyone,” he told Wired in an email. “It seems silly to say, but I was quite struck by this picture.”

Most of the time, using our phone restricts us to a flat, screen-sized world. Doucet, noticing this, wanted to create something that would allow people to interact with their phones and the real world simultaneously. The result was AMU, a perspective-bending mobile game that the NYC-based designer created with app developers at Sirqul.

You have to physically move your mobile device to catch it.

Think of AMU as a virtual game of catch. Simply put, the goal is to catch a white virtual ball with an empty circle in the middle of the screen. It all sounds easy enough until the ball disappears from the screen. “You have to physically move your mobile device to catch it,” Doucet explains. “Many people just try to tilt their phone, but that won’t get you very far.” AMU is tricky and a little frustrating until you realize that the vanishing ball leaves a visual trail, indicating how you need to move in order to catch it. The game forces players to physically move around while still concentrating on the phone screen, making it a good test of agility and eye-hand coordination (…or lack thereof). Doucet says the guys at Sirqul found the frantic movements they made while playing so hilarious that they decided to activate the front-facing camera so players can record themselves playing AMU and send it to their friends.

AMU’s design process was unusually straightforward. Doucet knew from the outset that he wanted to push the boundaries of mobile user interface by making physical space as important as the screen. From there, it was really just a matter of quickly storyboarding the game and adding the simple graphics and menus.

“Rather than start with designing a game on a screen, I thought about the game taking place all around you,” Doucet explains. “Really thinking of the screen as a portal in which to view the game, rather that being the location of the game itself.”

Doucet and Sirqul aimed to keep AMU as simple as possible from a design perspective. The game’s interface is clean and intuitive, with no instructions and minimal buttons. This simplicity helps, considering the movements required by AMU do take some getting used to. Doucet notes that while the game can be challenging at first, people typically catch on after the first couple of levels. But don’t get too comfortable. The better you get, the faster the ball moves and the harder it is to catch it.

“As of now, I’m about 20th down on the leader boards,” says Doucet. “Even I find it quite challenging after 5 or so minutes.”

AMU is available in the Apple app store for $.99.