Would my 21-year-old’s subsidy be based on his income – or mine?

Q. My 21-year-old son is in college. I know he could stay on my employer's plan until he is 26. But he might be able to get better coverage in the exchange. Would he be eligible for a government subsidy? Would it be based on his income or mine?

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A. If you claim him as a dependent on your income tax, then your income would be included in determining whether he gets a subsidy. Subsidies are tax credits, so eligibility for them is a function of total household income and the number of people in the household.¹
So while your income would be counted, you (and any other members of your tax household) would also be counted as a member of the household when your income relative to the federal poverty level (FPL) is calculated.

To clarify how this works, consider the 2025 FPL numbers, which are used to determine subsidy eligibility for 2026 coverage.² If a single person in the continental U.S. is earning $39,125, that's 250% of FPL. If a household of three is earning $66,625, that's also 250% of FPL. The Marketplace uses the percentage-of-FPL calculation to determine the percentage of your household income you must pay for the benchmark plan.

So a household with more people can have a higher income and still qualify for subsidies. But subsidy amounts are based on the Marketplace premiums being a certain percentage of the household's income (the percentage is on a sliding scale that varies with income). This is why a household is less likely to qualify for subsidies if some members of the household aren't enrolling in the Marketplace plan.

To illustrate this, let's use some hypothetical numbers: We'll say the subsidy calculation determines that the household shouldn't have to pay more than $700/month for Marketplace coverage. That number will be the same regardless of how many members of the household enroll in the Marketplace plan. But the total cost of the Marketplace plan will vary depending on how many household members are enrolling, since additional premiums are added for each household member (but only a maximum of three dependents under age 21).

So imagine that the whole family is enrolling, and their combined total premium for the benchmark plan is $1,800/month before subsidies. That means their subsidy will be $1,100/month, to bring down their after-subsidy premium to $700. But if only one household member is enrolling, their full-price premium might be only $600/month. In that case, they won't qualify for a subsidy at all, since their full-price premium is under $700.

You can use a subsidy calculator to play around with this and get an idea of how subsidy amounts change when the number of people enrolling in coverage is lower than the number of people in the household. It can be counterintuitive to see how subsidy amounts change when members of a household are not all enrolled in the same plan. But subsidy eligibility calculation is based on the cost of the benchmark plan for only the family members who are enrolling via the marketplace (in this case, just your son), versus how it compares with the whole tax household's income.

If you don't claim your son as a dependent, he might be eligible for Medicaid, depending on his income and whether he's in a state that has expanded Medicaid under the Affordable Care Act (depending on your family's total income and the state where he lives, he might be eligible for Medicaid even if you do claim him as a tax dependent).

If he files his own income tax return and his income is high enough to be subsidy-eligible (meaning he's not eligible for Medicaid, or is in a state that hasn't expanded Medicaid and has an income of at least the federal poverty level), he might qualify for a subsidy.

He has the option to remain on your health insurance until he turns 26, regardless of whether or not you claim him as a dependent on your tax return. But depending on your plan and how far away from you he lives while he's in college, he might find that he has little or no access to in-network providers. Getting his own plan—either in the exchange or from the college itself—would ensure that he has access to network providers where he's going to school. That's something to consider, even if he doesn't qualify for subsidies in the exchange based on household income.

But keep in mind that he'll only be able to enroll in his own plan during open enrollment (in most states, that's November 1 to January 15, although this window will become shorter starting in the fall of 2026) or during a special enrollment period triggered by a qualifying life event. If he's eligible for Medicaid, however, enrollment is available year-round. And there are some state-run programs, such as the Basic Health Programs in Oregon and Minnesota (and a similar program in New York), that have year-round enrollment.

Here's an outline of the various coverage options available for college students, and what to keep in mind when you're deciding.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written hundreds of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.