Three Essential Reasons to Update Your Financial Information During ACA Open Enrollment

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Last year, millions of Americans received advanced premium tax credits to help pay for Marketplace health insurance. If you’re among them, now’s the time to report any changes to your income or household size — such as a new baby or divorce — to the exchange.

Here are 3 reasons to keep your financial information up-to-date.

1. To avoid a bill at tax time

When you take your premium tax credit throughout the year, the government is paying your insurer each month to help cover the cost of your health plan in advance. The amount it pays is based on what you stated in your application your estimated income would be for the year.

When you file your 2014 taxes, the IRS will calculate the amount of subsidy you were actually eligible to receive based on your income. If by the end of the year you earned more than you initially reported, you could be getting too much financial help. In that case, you may have to pay back the extra money you received but weren’t entitled to when you file your taxes.

In most cases, the income you estimated when you applied for insurance last year will be carried forward into 2015 unless you update your account. So although it’s too late to make changes that will impact your 2014 tax return, you can avoid a bill when you file taxes next year by making sure your information is up-to-date.

2. Avoid higher monthly bills

Maybe you estimated you would earn more money than you actually did when you applied for insurance last year, and are therefore entitled to more help than you’re currently getting. The good news is that you could get that money back when you file 2014 taxes in the form of a refund.

But because in most cases your 2014 tax credit will be carried forward you may now be paying more for your 2015 insurance plan than you need to. That’s because the formula for determining subsidies changes each year. So even if nothing about your situation has changed, in all likelihood your tax credit won’t be accurate if you don’t update your information.

And, to keep your monthly bills as low as possible, consider shopping to see if there’s a better health plan available for you. A recent Department of Health and Human Services analysis shows more than 7 in 10 people already enrolled can find a lower premium plan with similar benefits by returning to shop. Nearly 8 in 10 will be able to find a health plan costing $ 100 or less a month.

3. Update your information year-round

We never know what the year ahead may bring – a new baby, a new job, an offer of health insurance from an employer, a raise, a pay cut, marriage or divorce. Any change to your family situation or income should be reported to the Marketplace as soon as possible. Adjustments to your subsidy either up or down can be made right away.

To learn more about the Health Insurance Marketplace and how the Affordable Care Act impacts you and your taxes, visit

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