How to Assist Clients with Marketplace Household Income Estimations

All individuals applying for an Affordable Care Act (ACA) insurance plan through either the Federally Facilitated Marketplace (FFM) or a state-based marketplace (SBM) must report their household income. This allows the marketplace to estimate your clients’ eligibility for cost-saving reductions.

To help you better assist clients who are applying for marketplace coverage, we’ll discuss the process of estimating their income, what information you need to have available to do a proper estimation, and how to report changes throughout the year if they occur.

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How to Estimate Household Income

There are a few pieces of information you and your client will need to have accessible to properly estimate their household income. Have handy a recent federal tax return, some basic info about their household, and what they expect their income to look like for the upcoming year.

Have handy a recent federal tax return, some basic info about their household, and what they expect their income to look like for the upcoming year.

Number of Household Members

The household members include the tax filer, their spouse (if applicable and legally married), and any tax dependents they may have. Even if these individuals do not need health care coverage, include them in the number of household residents.

HealthCare.gov has a helpful chart that helps clients decipher unique situations where it may be difficult to determine household members, such as children whom they may not have full custody of, foster children, and roommates.

Amount of Taxable Income

When clients enroll in coverage, they’ll need to estimate their household’s income for the upcoming year, rather than the previous year. Clients will input their current monthly income and their yearly income.

You will need:

• Your client’s adjusted gross income from their federal tax return (including wages, tips, unemployment compensation, etc.)
• Excluded foreign income
• Non-taxable Social Security benefits
• Tax-exempt interest

You will use these dollar amounts to calculate your client’s Modified Adjusted Gross Income (MAGI) to determine their eligibility for cost-reductions. Your clients may be required to submit documentation proving income such as pay stubs and a Letter of Explanation.

Additionally, your client must report any taxable income of household members who do not need health coverage. Subsidies and other savings are estimated from total household income.

For individuals who work irregular hours or seasonal work, report their current income. You can assist them with updating their income on their application. We’ll discuss that process next.

What Income Changes to Report

If your client has experienced a significant life change that has affected their income or number of household members, remind them to update their application as quickly as possible. These changes may affect the savings they are eligible for. Even if your client has already successfully enrolled in marketplace coverage, updating their application ensures that they are getting the cost reductions they are eligible for.

Even if your client has already successfully enrolled in marketplace coverage, updating their application ensures that they are getting the cost reductions they are eligible for.

When Your Income Increases

If your client begins to earn more, remind them to update their application and offer your assistance. If a member of their household leaves the home, help them through the process as well. These clients may qualify for less cost-saving reductions. If your client does not properly report these changes, they may owe more when they file their income taxes at the end of the year.

When Your Income Decreases

If your client is earning less than they were before, help them to update their marketplace application for these changes as well. They may be eligible for more savings than they were previously. If a new household member joins the home, your client could be eligible for a lower monthly premium or a Medicaid plan or CHIP plan. There are several states that have expanded Medicaid eligibility under the Medicaid unwinding.

How to Update Household Income

For clients using a SBM, refer to the marketplace in your state to update their information. Clients participating in the FFM can update their income information online, by calling the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325), or in person with you. The online marketplace portal makes it easy for clients to review and edit their existing applications. Once an application has been updated, you will have to resubmit it.

Clients should follow the directions below to update their application online:

1. Log in to your HealthCare.gov account.
2. Choose the application you want to update.
3. Click Report a Life Change on the left-hand menu.
4. Read through the list of changes and click Report a Life Change to get started.
5. Select the kind of change you want to report.
6. Navigate through your application and report any changes to your income, household members, or address; new health coverage offers; and other information.
7. After you’re done, you’ll get new eligibility results explaining your options to change plans.

If prompted, you must complete enrollment for these changes to take effect.

If you’re an agent selling ACA plans in FFM states, consider using HealthSherpa to simplify your enrollments and keep client documentation in one place. You can submit an application update on your client’s behalf if they enrolled through HealthSherpa and you’re listed as their agent of record.

Follow these steps to report a life change in HealthSherpa:

1. Log in and access your agent dashboard.
2. Click on Clients, search for the client, and click on their name.
3. Select Report Changes.
4. After updating the application and downloading your client’s updated eligibilty results, a prompt will come up to confirm and finalize the enrollment.
5. Indicate if the individual will use their full amount of approved tax credit, and select Enroll to finalize.

If you encounter an error during this process, review the CMS System Changes post from HealthSherpa and review alternative submission options.

Troubleshooting Common Errors

The most common error that you may receive when reporting or updating a client’s household income is a data matching issue. These are inconsistencies between what is reported and what is estimated by the marketplace. You can help your client avoid these errors by properly reporting all income, completely filling out the marketplace application, and accurately predicting future income. Carefully ensure that the application is accurate and complete. Help them file their application and reconcile their premium tax credit.

What Happens If I Don’t Submit Documents?

If your client fails to upload documents by the deadline, they could lose marketplace coverage or the ability to apply for subsidies. The deadline for submission can be found in your client’s letter of notice or on the marketplace’s online platform.

File criteria for uploading includes:

• Can be a .pdf, .jpeg, .gif, .xml, .png, .tiff, or .bmp. file
• Cannot be larger than 10MB
• No special characters within file names

Correctly estimating your clients’ household income is crucial to make sure that your clients receive the savings they’re eligible for. As their agent, you’re their trusted advocate and responsible for assisting them through this process. Acting compliantly and in your client’s best interest is a great way to earn the trust of your clients for life.

We’re here to help you be a better agent for your clients with resources such as our guides and eBooks, including The Complete Guide to Selling Affordable Care Act Insurance Plans, and Knight School, our online educational resource. Register with Ritter for free to receive personalized sales support from our under-65 sales team.