Life Ch-ch-ch-ch-changes and Your Health Insurance Coverage

September 09, 2015 : Teresa Shipley Feldhausen

Ed note: Life can be stressful enough without having to worry about how major changes might affect your Marketplace health insurance. Never fear – we’ve broken it down so you don’t have to.

If you have health insurance through the Marketplace, you need to report life changes when they happen. A life change is any event that alters your residence, income, family configuration, or tax filing status, which, in turn, can affect the health insurance coverage or credits for which you’re eligible.

You must notify the Marketplace if you:

  • Get married or divorced
  • Have a child, adopt a child, or place a child up for adoption
  • Have a change in income
  • Get offered health coverage through a job or get covered through a government program like Medicare or Medicaid
  • Change your primary residence
  • Have a change in disability status
  • Gain or lose a dependent
  • Become pregnant
  • Experience other changes that may affect your income and household size
  • Other possibilities include a change in tax filing status; change of citizenship or immigration status; incarceration or release from incarceration; change in status as an American Indian/Alaska Native or tribal status; correction to name, date of birth, or Social Security number.

When do I have to report the change?

Let the Marketplace know as soon as possible. Let’s say you had a life change which results in a lower premium tax credit – maybe your annual salary when you signed up for healthcare was $20,000 but you got a new job at $40,000 a year. If you delay reporting that salary increase, you may have to pay money back when you file your federal tax return. In other words, your tax bill would be higher than expected. Even if you can’t totally avoid some payback, the sooner you report the change, the smaller the impact on your refund.

On the flip side, a life change could result in a larger premium tax credit to help you afford insurance. This could happen if you make less money than you estimated when you signed up for insurance or added a person to your household. You could be missing out on savings by not reporting the change. The IRS details how life changes can affect your premium tax credit eligibility.

It is especially important to report changes quickly if you are self-employed. Since self-employed people have to estimate their income when applying for Marketplace coverage, life changes can have a large impact on financial status and premium tax credit.

How should I report the change?

You can let the Marketplace know by logging in to your online healthcare account or by phone. You cannot report by mail.

What if my life change makes me eligible for a different healthcare plan?

Once you’ve reported your life change, you’ll get information from the Marketplace about any new coverage plans and savings you’ll be eligible for.

Certain changes (such as having a baby, getting married or losing other coverage) could qualify you for a special enrollment period to change plans, in which case you’ll have 60 days from the life event to enroll in new coverage. If you’re not eligible for a special enrollment period, but the tax credit you qualify for has changed, you can adjust the amount of the tax credit applied to your monthly premiums.

I got a new job that is providing health coverage. What do I do?

Congratulations on the job! If you’re enrolling in employer-sponsored coverage, you’ll probably want to cancel your Marketplace coverage. Eligibility for employer-sponsored coverage can make you ineligible for a premium tax credit. Canceling your Marketplace coverage is easy and fast. You can drop coverage for just yourself or for everyone on your plan. Cancellation can take 14 days, so make sure it won’t take effect before your new coverage starts. That way, you’re always covered.

Other questions?

Check out this Marketplace video, a handy explainer on reporting life changes.

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Teresa Shipley Feldhausen

Guest Contributor

Teresa is a health and science reporter living in Washington, D.C. She has been a researcher for National Geographic Magazine, a writer and blogger for the Student Conservation Association and a reporter for Idaho newspapers.