The health insurance marketplace (also known as the exchanges) opened for business on October 1. Although the rollout has not been as smooth as most of us hoped, the technical glitches will eventually be fixed and this will be the only place for many Americans to purchase insurance. Amidst all the confusion surrounding the Affordable Care Act, one bright spot will benefit many middle class Americans, the Premium Tax Credit.

The Premium Tax Credit was introduced alongside the new health insurance marketplace in 2013. This credit allows those with moderate incomes to offset the cost of the health insurance policy they purchase through the exchanges.

How to Qualify for the Premium Tax Credit: Some basic requirements must be met to be eligible for the Premium Tax Credit. They include:

• You must purchase your insurance through the exchange

• You must not be already eligible for a plan through your employer or the government

• You cannot be claimed as a dependent on another person’s tax return

• If you are married, your tax return must be filed jointly

• And of course, you must meet certain income limitations

Premium credits are available for individuals and families with incomes ranging from 100% to 400% of the federally defined poverty level. This translates in dollars to $23,500 up to $94,200 per year for a family of four. The lower your income, the higher the amount of credit you will receive. The very lowest incomes on the spectrum will qualify for Medicaid.

How Do I Receive my Credit? The Premium Tax Credit has two ways for you to qualify. When enrolling, you can decide to have some (or all) of your credit paid in advance to your health insurance provider or you can choose to receive it later as part of your refund when you file your federal tax return.

It should be noted that, at least for now, the government is issuing the Premium Tax Credits based on stated income. In other words, it is based on the ‘honor’ system. Your credit will be calculated based on whatever income you report for 2014. For this reason, if you decide to have the IRS give you an advance on the credit, it is best to err on the conservative side, which in this case means over-estimating your income. If you decide to wait until you file the actual return to receive your credit, then there is no need to be as concerned about the accuracy of your income estimate at the time you apply for your policy.