When you apply for Marketplace coverage in Michigan, the number that matters most is the income you expect for next year. Your savings are based on what you expect to earn next year, not last year. A careful estimate helps you avoid a surprise at tax time. That matters whether you build cars in Detroit or Lansing, work a summer season on Mackinac Island or up north, farm in the Thumb, drive for an app in Grand Rapids, or run your own business anywhere in the state.
This article is educational. Instant Health Help is a licensed health insurance agency, and our agent, Lobsang Rivas, is licensed in Michigan. Michigan uses HealthCare.gov for Marketplace plans. We are not HealthCare.gov, CMS, MDHHS, or an insurance company, and the Marketplace decides what you qualify for. We do not quote prices or name plans here. See HealthCare.gov’s guide to estimating your income.
The short answer
- Start with last year’s tax return, then adjust for what you expect to change.
- Count the right people and the right income. Some money counts, and some doesn’t.
- Update your application when your income changes during the year.
Step by step, the HealthCare.gov way
HealthCare.gov lays out three steps:
- Start with your adjusted gross income (AGI). It’s on IRS Form 1040, line 11, of your most recent federal tax return.
- Add these if you have them: tax-exempt foreign income, non-taxable Social Security benefits, and tax-exempt interest. Don’t add Supplemental Security Income (SSI).
- Adjust for changes you expect for everyone in your household, like a raise, a new job, changes to your hours, a new business, or someone moving in or out.
No recent tax return? HealthCare.gov says you can use the “federal taxable wages” on your pay stub. If your stub doesn’t show it, use gross income before taxes and subtract what your employer takes out for health coverage, child care, or retirement savings. Then multiply by the number of paychecks you expect that year.
Whose income counts
For most people, the household is the tax filer, their spouse, and their tax dependents, even dependents who don’t need coverage. HealthCare.gov says a dependent’s income is counted only if that dependent is required to file a federal tax return. So a teen’s small part time paycheck may not count. Check the federal filing rules if you aren’t sure.
What counts and what doesn’t
HealthCare.gov says to count things like:
- Wages from your job, and tips.
- Net income from self-employment or a side business.
- Unemployment compensation.
- Social Security, both taxable and non-taxable, including SSDI.
- Most withdrawals from retirement accounts, and capital gains.
And don’t count things like child support, gifts, loans, SSI, veterans’ disability payments, workers’ compensation, Child Tax Credit payments from the IRS, and alimony under newer divorce or separation agreements. HealthCare.gov has the full list and the cutoff date for alimony on its income page.
Overtime, seasonal, and gig income
Plenty of Michigan paychecks go up and down. Auto and factory shifts gain or lose overtime, tourism and lake jobs slow down after summer, farm work follows the harvest, and gig or 1099 work changes week to week.
HealthCare.gov says that if your income is hard to predict, you can report your current income, and you’ll see a yearly estimate you can update later. To build a good guess, it suggests looking at your past experience, recent trends at your workplace, and, if the job is new to you, asking people in the same field. It also has an income calculator on the estimating page. If you’re self-employed, use your expected net income after business expenses.
Why updating matters
If your income goes up during the year, report it right away. There’s no longer a cap on how much extra premium credit you may have to pay back. Premium tax credits are generally available to households earning between 100% and 400% of the federal poverty level. Above 400%, the credit generally isn’t available.
If your income drops, update your application too. You may qualify for more help, or for Medicaid.
When Healthy Michigan Plan fits instead
If your estimate is low, Healthy Michigan Plan may be the better match. The state says it covers Michigan residents ages 19 to 64 with income at or below 133% of the federal poverty level who aren’t on Medicare or other Medicaid and aren’t pregnant when they apply. Michigan also says new work requirements for the program begin January 1. Apply through MI Bridges, by calling 1-855-789-5610, or at your local MDHHS office. HealthCare.gov says it sends your application to the state if it looks like someone may qualify for Medicaid. Read our Healthy Michigan Plan vs Marketplace guide for the details.
Dates to know
Open enrollment dates and coverage start rules are in our Michigan open enrollment guide. You can also call HealthCare.gov at 1-800-318-2596.
How we help
We are licensed in Michigan and help by phone and online, in English or Spanish. Learn more on our Michigan health insurance help page. We can walk through your income estimate with you, line by line, compare plans, and help you enroll if you decide to. We won’t ask for your HealthCare.gov password. If someone in your home is turning 65, see our Michigan turning 65 guide.
Want help with your estimate?
Have last year’s tax return, a recent pay stub for everyone who works, and any 1099s handy, and we’ll build your estimate together.
Call (321) 315-0054 | agent@inshh.com
You may qualify after tax credits. Eligibility varies.
Featured photo: Arch Rock, Mackinac Island, Michigan by rboed*, CC BY 2.0, cropped with text added.