Do you need coverage from the Health Insurance Marketplace? Ask yourself these 3 questions before you sign up.
1. Am I eligible for Medicaid?
If yes, you are not eligible to enroll with tax credits on the Health Insurance Marketplace / HealthCare.gov. If you live in a family with children, your children may be eligible for Medicaid/MIChild/Healthy Kids while parents may be eligible for the Marketplace / HealthCare.gov.
You are eligible for Medicaid if your income is at or below a certain amount called the Federal Poverty Level (FPL). Federal Poverty Levels change each year and are determined by your household income and household size. The income level for children to qualify for Medicaid/MIChild/Healthy Kids is different than the qualifying income level for adults. Check our Federal Poverty Level Guides to see if you or the children in your tax household qualify for Medicaid.
You can still choose to sign up for a Marketplace plan without tax credits, but your monthly payments will be higher. If you are eligible and enroll in Medicaid, your health care costs will be significantly lower.
2. Does my employer offer affordable insurance?
“Affordable” doesn’t mean if you think it’s a good deal or not. It’s an official term, with an official calculation. The number that determines whether or not your employer insurance is considered affordable changes each year.
For 2026, if the cost of insurance offered by your employer is less than 9.96% of your household income for the lowest-priced, ACA-compliant employee-only plan, you are not eligible to enroll with tax credits on the Marketplace. However, if you are eligible for Medicaid, you can choose Medicaid instead of your employer insurance. Read more about affordable coverage.
EXAMPLE:
Marty just started working at a restaurant. He thinks it’s pretty cool that they offer health insurance for their employees. When he sees the offer of insurance, the cost of the lowest-priced employee plan is $375 per month. He’s about to sign up when decides to check if this amount is actually considered affordable, or if he might qualify for a less expensive plan from the Marketplace / HealthCare.gov.
Marty makes $20/hour (before taxes) and works 40 hours/week. He lives alone, so Marty is a “household” of one. His household income is just what he makes.
$20/hour × 40 hours/week × 4 weeks (1 month) = $3,466.67
He looks up the current affordability amount. For 2026, the percentage is 9.96%.
Now, he needs to calculate 9.96% of his income:
$3,466.67 (monthly income) × 0.0996 = $345.28
So 9.96% of his monthly income is $345.28. The lowest-price employee plan ($375) costs more than 9.96% of his monthly income ($345.28). He is eligible for a plan with tax credits from the Marketplace.
If his employer offers a plan that is $340/month, then he is not eligible for a plan with tax credits from the Marketplace.
3. Do you have income and are you filing taxes?
You must report your income to sign up for Marketplace/HealthCare.gov plan. If you don’t have income, you may be eligible for Medicaid (see #1). Tax returns are really helpful documents to have on hand to estimate your income for the coming year.
If you don’t have a tax return from the past year, don’t worry–you can still sign up for a Marketplace/HealthCare.gov plan and get advanced tax credits if you’re income-eligible for them. But, make sure you do file your taxes by April, and reconcile your healthcare tax credits when you do. If you don’t, you won’t be eligible for these cost savings from the Marketplace in the future. Read about reconciling tax credits here.
Answers
If you answered No, No, Yes to those questions, it’s time to get your Marketplace / HealthCare.gov checklist ready and enroll!