Suppose you currently have health insurance from your state's marketplace, and you have enough income that you are not eligible for any subsidy. Now suppose you lose your job and begin collecting unemployment, and your income is now in the range where you would qualify for a subsidy. How should this be treated when you don't know how long you will be unemployed for? Can you immediately begin to receive the subsidy and then immediately stop receiving it when you get a new job? (Let's assume the new job makes you ineligible for the subsidy once again.)

One important factor is that I'm guessing you wouldn't want your plan to change, because that could reset your deductible.

If rules vary by state, then I'm specifically interested in NY and IL.

  • I'm not 100% sure of this, but I would guess that a job loss would not be considered a qualifying event in this case, since you would not be losing healthcare coverage from your employer. So your remark about potentially changing plans and resetting your deductible shouldn't apply here regardless. – Wesley Marshall Jan 2 '16 at 20:57

The income calculation for subsidy is on annual basis, and the final accounting is done on your tax return.

You get "subsidized" price based on your estimate, however at the year-end, on your annual tax return, you'll be calculating the actual subsidy. If the actual subsidy ends up being less than you received - you'll have to repay it back. Similarly, if you are entitled for more subsidy than you actually received - you'll get a tax credit.

That means that your estimate should be as close as possible to your actual annual income, so that at the year-end you won't get any nasty surprises.

For your specific situation, if you estimated based on full employment, but because of unexpected unemployment your income was less than the estimate and you end up qualifying for a subsidy - you'll get a credit on your tax return. You do this on Form 8962, which is a part of your tax return. Here's more detailed explanation on the IRS website.

You're not supposed to re-enroll every month, and you're not supposed to recalculate your premium mid-year, so your plan shouldn't change and what you pay for it shouldn't change, once you've enrolled. Depending on what exchange you used you may be able to update the subsidy, though, if your income estimation changes and the exchange allows updating it. See here the details for the HealthCare.gov (the Federal exchange), check your States for specific rules applicable on their exchanges.

  • 1
    I don't think your last paragraph is correct. According to, for instance this page you should "update your Marketplace application as soon as possible when your income or household members change during the year". The estimate is annual, but the subsidies are allocated monthly, and your 1095-A can show different subsidy amounts for different months. (Whether it's worth doing this if you expect to be unemployed only for a short time is another question. As you say, you can just handle the change at tax return ti – BrenBarn Jan 2 '16 at 23:25
  • @BrenBarn thanks, updated. I think it varies depending on the exchange. – littleadv Jan 3 '16 at 1:07
  • "If the actual subsidy ends up being less than you received - you'll have to repay it back." Note that you may not have to pay back all of it -- if your annual income is less than 400% of the poverty level, there are repayment limits capping how much you have to pay back. – user102008 Jan 3 '16 at 11:10

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