Should You Update Your ACA Health Plan After a Change in Income?

When it comes to ACA health insurance, understanding how your income impacts your coverage is essential. If you’re planning a significant income change, you’ll need to prepare for potential changes to your health insurance plan.

Understanding Income Reporting and Subsidies

Your annual income determines your eligibility for ACA insurance subsidies, which help reduce your monthly premiums. When you apply for ACA coverage, you estimate your expected income for the upcoming year. If your actual income differs from your estimate by more than 12k, you must report it to your insurance company. This adjustment may lead to changes in your subsidy amount or eligibility.

Options After an Increase in Income

If your income increases above the threshold for your current subsidy level, you will likely lose some or all of your financial assistance. In this case, you have several options:

Stay in Your Plan: You can keep your current health plan but pay the full premium without subsidies. However, this may become financially taxing.

Lower Your Plan Tier: You can downgrade to a lower-cost silver or bronze plan if you qualify. Bronze plans have lower premiums but higher deductibles and out-of-pocket costs, while silver plans offer a balance between cost and coverage.

Consider a Different Plan: You can explore alternative plans within the same metal tier or even switch to a different health insurance company. By shopping around, you may find a plan that better suits your needs and budget.

Special Circumstances: Pregnancy

If you’re expecting a baby, it’s crucial to consider how this will affect your health insurance. The birth of a child is considered a qualifying life event, allowing you to make changes to your coverage outside the standard enrollment period. You can add your baby to your existing plan or explore new options to ensure they have affordable health care.

Conclusion

It’s important to stay informed about the potential impact of income changes on your ACA health insurance coverage. By understanding your options and reporting any changes promptly, you can ensure you have the right plan to meet your needs and financial situation. If you have any questions or need assistance navigating these changes, contact our team of licensed agents for guidance.