In order to apply for a health insurance plan on the marketplace, California residents will be required to provide an estimate for how much their household income will be for 2016. It’s important that applicants supply an estimate for the upcoming year and not for last year in order to qualify for the proper amount of savings. The following are a few things applicants should know about providing an estimated income on their application:
- For the most part, applicants should provide their gross income, which is their total income before taxes and other deductions are applied.
- Applicants may have the option to provide their income estimate as either monthly or yearly.
- Household income doesn’t just include the estimated income of the person filling out the application. It also consists of the income of their spouse (if they have a spouse) as well as their tax dependents—even tax dependents that aren’t in need of coverage.
The Types of Income Used
The following are the types of income that applicants will have to include in their estimate:
- Federal taxable wages—If the applicant’s pay stub includes federal taxable wages, they should use that number. If it doesn’t, then they should use the gross income number and subtract the amount taken out by the employer for health insurance, retirement plans and child care.
- Self-employment income—Applicants should include their net self-employment income, which is what they made minus their business expenses—they will be asked what type of work they do.
- Social security—The full amount of both taxable and non-taxable social security income needs to be included before any deductions. Social security disability income should be included as well; however, supplemental security income should not be included.
- Retirement income—IRA and 401(k) withdrawals should be included.
Other forms of income that have to be included include tips, unemployment compensation, alimony, capital gains, investment income, rental and royalty income, and excluded foreign income.
For additional information and advice regarding a marketplace application or about health insurance in general, be sure to visit us at The Benefits Store today.