Young Adults and Students

My parents are self-employed and buy coverage through the Marketplace. They earn too much to qualify for subsidies. I’m 24 and only earn $30,000 a year (about 220% of FPL.) My parents don’t claim me as a tax dependent, I file my own return. Can I be covered as a dependent under their Marketplace policy? If so, can I qualify for a premium tax credit and apply that to their premium? What about cost sharing subsidies?

You can be covered as a dependent up to age 26 on your parent’s Marketplace policy. If your parents don’t claim you as a tax dependent (and you file independently), then your eligibility for premium tax credits will be based on your income alone.  Some state-run marketplaces can calculate premium tax credits separately for family policies that cover two “tax households.”  However, so far, the federal marketplace (HealthCare.gov) has not been able to accommodate two tax households enrolling on one application.  As a result, many young adults will simply enroll in their own separate policy.  Check with your marketplace for more information.   With your income at roughly 220% FPL, you will qualify for a premium tax credit. If you enroll in your parents’ plan, the marketplace may let you elect to have your premium tax credit paid directly to your parents’ insurer each month; otherwise you can claim the premium tax credit later on your tax return when you file.

With an income of 220% FPL, you would also be eligible for cost sharing subsidies if you enroll in a Silver plan.  These cost-sharing reduction (CSR) plans modify Silver plans to reduce the deductibles and copays that would otherwise apply.  However, in family policies that cover people in different “tax households,” eligibility for cost sharing subsidies will be based on the tax household that is least eligible.  Because your parents are not eligible for cost sharing reductions, you would not be able to receive these subsidies under their plan; you would need to enroll in a separate silver marketplace plan to access the cost sharing subsidies.

While we have made every effort to provide accurate information in these FAQs, people should contact the health insurance Marketplace or Medicaid agency in their state for guidance on their specific circumstances.

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