State RegulationsNY specificDifficulty 1/5
What is the advance premium tax credit (APTC) under the Affordable Care Act?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under the Affordable Care Act, the premium tax credit is a federal subsidy for eligible individuals and families who buy coverage through the exchange. When taken in advance (the APTC), the credit is sent directly to the insurer each month so the enrollee's billed premium drops immediately, with the final amount reconciled on the federal tax return. It is not a loan, a deduction, or a state grant.
Why the other options are wrong
- A) The credit is federal, not a state grant, and it lowers rather than fully pays the premium in most cases.
- B) The credit belongs to eligible individuals and families buying exchange coverage, not to employers as a deduction.
- D) The APTC is not repaid in advance like a loan; it is applied monthly and reconciled through the tax return.
Memory hook
APTC pays the insurer monthly; the tax return settles the score.