Why You Should Update Your Income on the Healthcare.gov Marketplace & How to Do It
One of the main reasons why someone would choose a Healthcare.gov federal marketplace health insurance plan is that, depending on your income and life situation, you could be eligible for government subsidies that help you save money. While you won’t have to worry much about adjusting your plan if your income and life situation stays the same throughout the term year of your plan, if things do change, it’s important to alert the Healthcare.gov Marketplace so you avoid having to pay back the difference later.
In this blog, learn more about the potential subsidies you can get with a government healthcare plan, how income affects them and how to work with your broker to make changes when needed.
Key Takeaways
- If your income significantly changes and puts you over or under the federal poverty limit, you should contact your health insurance broker to alert the Marketplace.gov provider. The earlier you can address how income affects your health insurance premiums and potential subsidies, the easier it is take advantage of Premium Tax Credits and protect your payments on a timely basis.
- Not reporting income changes to the federal marketplace could result in having to back-pay the difference in subsidies.
- If your income goes down, your broker can help adjust your income reporting so you can potentially pay a lower premium and/or qualify for government subsidies.
First: How Does Income Affect Marketplace.gov Subsidies?
Generally, we recommend Marketplace.gov healthcare plans when individuals and families qualify for government subsidies based on income levels or other conditions that qualify them. Individuals may qualify for Premium Tax Credits on healthcare coverage purchased through the Marketplace when:
- They’re a U.S. citizen or lawfully present immigrant with an income that’s at least as high as 100% of the federal poverty level. For an individual, the federal poverty level is an income of at least $14,580 in 2024. For a family of four, the federal poverty level is an income of at least $30,000 in 2024.
- They’re a lawfully residing immigrant with an income below 100% of the poverty line, but they’re not eligible for Medicaid because of their immigration status.
Also, to qualify for Premium Tax Credits, individuals must not qualify for public healthcare coverage, including the Children’s Health Insurance Program, Medicaid, military coverage or Medicare.
To qualify for Premium Tax Credits, individuals must also not have access to health insurance through an employer. However, there are some exceptions, such as when an employer healthcare program doesn’t provide a minimum level of coverage, and when the employer healthcare program is unaffordable because the employee share of the premium exceeds 8.39% of the employee’s income in 2024.
Generally, if your income doesn’t meet the federal poverty line standards, you won’t typically qualify for subsidies under Marketplace plans. The size of Premium Tax Credits is based on a sliding scale, so a lower income could result in a larger tax credit to help cover the cost of insurance.
The KFF has a Health Insurance Marketplace Calculator that provides estimates for health insurance premiums and subsidies for health insurance coverage through the Marketplace.
What to Do If Your Income Significantly Changes
If your income significantly increases or decreases, it’s important to immediately reach out to your individual or family health insurance broker. Your insurance broker can help update your income on the federal Marketplace.gov health insurance marketplace and ensure you’re paying what you need to now, so you can either take advantage of subsidies or avoid having to make back payments.
If you’re getting a subsidy, and your income increases, you’ll be liable to pay back the difference in subsidies you were getting, due to the new higher income. Your broker can update your income so that you avoid having to make those back payments.
If your income goes down and qualifies you for a government subsidy, your broker can report it so that your income is adjusted. You may be able to pay a lower premium when your income goes down, so contact your broker whenever there’s a change, even when you’re not sure if your income change will qualify you for a different premium or subsidy.
Interested in Marketplace.gov Insurance, or Getting a Better Plan?
When you want to get health insurance or re-evaluate your current plan, the expert team at AZ Health Insurance Brokers can help. We can help you get a Marketplace.gov plan, adjust your current Marketplace.gov plan, qualify for subsidies based on income or switch from a Marketplace.gov plan to something new.
To talk with an insurance expert now, call 602.617.4107, email quotes@azhealthinsurancebrokers.com or contact us online.
New ParagrapMarketplace.gov Income FAQs
Does marketplace ask for proof of income?
To qualify for Premium Tax Credits through the federal Marketplace.gov health insurance market, you may be asked to submit documents to confirm your income information. This information may come through federal income tax returns for you as an individual and/or your household, as well as additional documentation, depending on if the Marketplace can verify your income through its trusted data sources.
What income does Marketplace.gov use to determine subsidy eligibility?
The federal Marketplace.gov uses a figure called modified adjusted gross income (MAGI) to determine savings eligibility. MAGI is adjusted gross income (AGI), as well as any of the following: non-taxable Social Security benefits, tax-exempt interest and untaxed foreign income.
Does Social Security count as income for federal Marketplace.gov income levels?
When you apply for a federal Marketplace.gov health insurance plan, you will need to report Social Security income. Social Security income includes Social Security Disability Insurance (SSDI), retirement income and survivor’s benefits.
What disqualifies you from Marketplace.gov subsidies?
You won’t be eligible for a Premium Tax Credit if you enroll in an employer-sponsored healthcare program, including retiree coverage, that is minimum essential healthcare coverage. Eligibility won’t change even if the employer plan fails to provide minimum value or if it’s unaffordable. Enrolling in an employer-sponsored plan disqualifies you from Premium Tax Credit eligibility.
Will I have to pay back my Premium Tax Credit?
You will only have to pay back your Premium Tax Credit at the end of the year if you’ve taken more in advance than you’ll be eligible for based on your final income. If you’ve taken less money in the Premium Tax Credit amount than you qualify for, you’ll get the difference back. Make sure to report any income differences as soon as possible so you can ensure you’re making accurate payments and/or getting an accurate tax credit at the right time.
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