Broke the ACA Income Limit: What to Do Next

If you’ve recently experienced a change in income that affects your eligibility for Affordable Care Act (ACA) insurance, you may need to take action to avoid penalties or unexpected repayment of subsidies. Let’s explore your options and guide you through this situation.

Understanding the ACA Income Threshold

Before the COVID-19 pandemic, the ACA had an income threshold of 400% of the Federal Poverty Level (FPL). Above this threshold, individuals were not eligible for premium tax credits to help offset the cost of their health insurance coverage. However, the American Rescue Plan Act eliminated this income limit for subsidy eligibility through 2025.

Reporting Income Changes and Qualifying Events

It’s crucial to promptly report any changes in income to the Health Insurance Marketplace (healthcare.gov) or your state-based exchange. Failure to do so could result in you receiving premium tax credits that you’re not entitled to.

In this case, getting married would have opened a special enrollment period for your wife to update her income information. She should have reported the combined household income to accurately determine her eligibility for subsidies. If she did not, she may have received excess tax credits.

Contacting the Marketplace and Adjusting Income

Contact the Marketplace:

The first step is to contact the Health Insurance Marketplace and inform them of the income change. You can do this by calling 1-800-318-2596 or visiting healthcare.gov. The Marketplace will adjust your wife’s income information and recalculate her eligibility for subsidies.

Adjusting Income:

If the adjusted income exceeds 400% of the FPL, your wife will need to repay the tax credits she received. The Marketplace will inform you of the amount due and provide instructions for repayment.

Options for Health Insurance Coverage

After adjusting the income, if your wife is no longer eligible for premium tax credits, she still has options for obtaining health insurance coverage:

– Employer-sponsored insurance: If your wife’s employer offers health insurance coverage, she can enroll in their plan.
– Private insurance: Your wife can purchase a private health insurance policy directly from an insurance company. The cost of the premium will depend on her age, health, and the level of coverage she chooses.
– ACA unsubsidized plan: Your wife can continue to purchase a health insurance plan through the Health Insurance Marketplace, but she will not receive any premium tax credits. The cost of the premium will be based on her income and the plan she chooses.

Seeking Professional Help

If you need assistance navigating this process, consider seeking guidance from a licensed insurance agent. They can help you understand your options, compare different plans, and enroll in the coverage that best suits your wife’s needs.