How to Assist Clients with Marketplace Household Income Estimations

With changing guidelines and a flurry of questions, your client could be confused when they get to the annual household income line of their Affordable Care Act (ACA) insurance application.

If you’ve never helped a client with their ACA household income estimation before, it may be intimidating, especially if you don’t like math or working with numbers. But we’re here to help you.

Here’s how you can assist your client when they pick up the phone and give you a call. Share this crucial information to mitigate issues later when their income may change.

How to Estimate Household Income

There are a few pieces of info needed to properly estimate a client’s 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 can help a client 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 a client enrolls in coverage, they’ll need to estimate their household’s income for the upcoming year, rather than the previous. Your client will input their current monthly income and their yearly income on the application for coverage.

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 client 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.

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 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 of updating their application. Your client may qualify for fewer 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 Income Decreases

If your client is earning less than they were before, help them to update their marketplace application promptly. Select significant changes can result in higher savings! 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. Review your state’s guidelines by visiting Medicaid.gov to ensure that your client is still eligible for marketplace coverage.

How to Update Household Income

For individuals using an SBM, refer to the marketplace in your state to update their information. Any client 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 your client to review and edit their existing applications. Once an application has been updated, you will have to resubmit it.

Individuals 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 eligibility 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 it.

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 My Client Doesn’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

After the 2025 ACA Final Rule, exchanges must determine if an individual is no longer eligible for tax credits if they have failed to file a federal income tax return for one year. The federal exchange and any state marketplace must verify applicants’ projected annual income when they submit their application and attestation.

There is no longer an automatic 60-day extension that follows the 90-day grace period to resolve income inconsistencies. Be aware that the requirements are changing and that a client could lose coverage or cost reductions if there are errors of a lack of compliance.

Correctly estimating your client’s household income is crucial to make sure that your client receives the savings they’re eligible for. Hopefully you feel more confident answering client questions after gathering helpful tips and the most up-to-date guidelines.

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 Sales team.