What’s included as Income for Health Insurance? - American Exchange

What’s included as Income for Health Insurance?

When you are submitting an application for Health Insurance, you’ll need to estimate what your household income will be for the amount of time you want coverage. Our company, American Exchange, has a direct connection to the Federal Health Insurance Marketplace, as we will make sure your information is submitted. The only reason to submit your income is if you believe you will qualify for Advanced Premium Tax Credits or Subsidies. I have included a 2015 chart of the federal poverty level for you to get an idea if you will qualify for tax credits. You will qualify for Advanced Premium Tax Credits if you earn from 100 percent of the federal poverty level to 400 percent of the federal poverty level. If your income does not fall between these amounts, we will enroll you Off Exchange, direct with the Health Insurance company of your choice. It is best to accurately estimate your household’s income, so you will qualify for the right amount of savings. If you guess low, you will qualify for more Advanced Premium Tax Credits or Subsidies to reduce the cost of your Health Insurance. If you state your income is higher than it ends up being, you will owe more to the Health Insurance company on the front end. Any adjustment, high or low, to your Advanced Premium Tax Credits, will be adjusted on your refund at the end of the year. The Federal Health Insurance Marketplace uses an income number know as Modified Adjusted Gross Income(MAGI) to determine eligibility for Tax Credits or Subsidies.

Let’s get back to exactly what constitutes income by income type.


Income Type Include as Income? Notes
Federal Taxable Wages Yes If you pay stub lists “federal taxable wages,” use that. If not, use “gross income” and subtract the amounts your employer takes out of your pay for child care, health insurance, and retirement plans.
Tips Yes
Self-employment income Yes Include “net self-employment income” you expect – what you’ll make from your business minus business expenses.
Unemployment compensation Yes
Social Security Yes Include both taxable and non-taxable SSI.
Retirement or pension Income Yes Include most IRA and 401K withdrawals. (See details on retirement income in the instructions for IRS publication 1040).
Alimony Yes
Child Support No
Capital gains Yes
Investment Income Yes Include expected interest and dividends earned on investments, including tax-exempt interest.
Rental and royalty income Yes
Excluded foreign income Yes
Gifts No
Supplemental Security Income(SSI) No DO INCLUDE Social Security Disability Income (SSDI).
Veterans’ disability payments No
Worker’s Compensation No


Additional Important pieces of Information.

Make sure to include the income of all the people in your household based on your tax filing. If anyone in your household has health insurance coverage through an employer plan, a health insurance plan on the individual market, a public plan like Medicaid, CHIP, or Medicare, or another source, include them and their income on your application.

When you are applying for coverage, just let us know which members need coverage.

There are several ways to reduce your income with certain deductions. Deductions are listed on the front page of the 1040 form, and are as follows:

  • Alimony paid
  • Student Loan Interest
  • Educator expenses if you’re a teacher and pay for supplies out-of-pocket
  • Moving expenses if you’re moving to live much closer to your job.
  • Contributions to your individual retirement account if you are not offered a retirement account through your employer.
  • Tuition costs for school if you pay for the costs out-of-pocket and deduct them on your tax return.

For more information about your health insurance plan or for free advice, you can visit our website at any time or give us a call at 888.995.1674. American Exchange prides itself in eliminating the confusion that comes along with selecting a health insurance plan.