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 declare him as a dependent on your income tax, then your income would be included in determining whether he gets a subsidy. Subsidy eligibility is a function of total household income and the number of people in the household. So while your income would be counted, you (and any other members of your tax household) would also be counted a member of the household. So for example, while a single individual can’t get premium subsidies if his or her income exceeds $48,240 in 2018, he or she could get a subsidy as a member of a household of two with a total combined income of up to $64,960, even if just one person is enrolling in coverage through the exchange (note, however, that subsidies aren’t necessarily always available to people with income under those limits, and sometimes it can be counterintuitive to see how subsidy amounts change when members of a household are not all enrolled in the same plan).

If you don’t claim him 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. If he files his own income tax return and his income is high enough to be subsidy-eligible (in 2018, at least $12,060 in states that haven’t expanded Medicaid, and at least $16,763 in states that have expanded Medicaid), he might qualify for a subsidy, as long as his income doesn’t exceed $48,240 (all of these income numbers are adjusted annually based on the federal poverty level guidelines).

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.

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

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