ACA Health Insurance: A Guide for Temporary Income Change
Losing or gaining a job can significantly affect your health insurance coverage under the Affordable Care Act (ACA). If you’re like the individual in the post, who will be earning a summer income before returning to being unemployed, understanding your options is crucial.
Enrollment and Change of Income
Generally, when you start a new job, you are eligible for a Special Enrollment Period (SEP) to enroll in health insurance. However, this may not always apply. In the post, the individual was previously unemployed and had no insurance. Starting a temporary summer internship with an income above the subsidy threshold would likely trigger an SEP.
Subsidy Eligibility and Cancellation
ACA subsidies are income-based. In the post, the individual’s summer income will be around $20,000. Based on that income, they may be eligible for a subsidized plan through the Health Insurance Marketplace.
However, once the individual returns to being unemployed in the fall, their income will drop back to $0. This change in income may not necessarily affect their subsidy eligibility for the remainder of the year, as the subsidies are based on annual income.
Consequences of Canceling Insurance
If the individual chooses to cancel their subsidized insurance after their summer income ends, they may face a tax penalty for not maintaining coverage for the entire year. The penalty is a percentage of their annual income.
Recommendations
Considering the above factors, the best course of action for the individual in the post may be to maintain their subsidized insurance throughout the year, even after the summer internship ends. This would avoid the penalty for not having coverage and ensure they have health insurance coverage in case of any unexpected medical expenses.
Additional Considerations
It’s important to note that the situation described in the post may not apply to everyone. Individuals should always consult with a licensed insurance agent or visit Healthcare.gov to determine their eligibility for ACA subsidies and the best health insurance options for their specific situation.
Question? or Need a Free Quote?
Contact Us
Reach out to us for free expert insurance advice and solutions. We will help you solve ACA (Obamacare) related questions and problems. Will contact you within 24 hours of receiving your message.