How Changing Family Circumstances Can Impact ACA Health Plan Renewals

Steve sat at his dining table in Amarillo, thinking over the changes in his family over the past year. His oldest son had just turned 26, meaning he’d no longer be covered under the family’s health plan, and his wife had started a new job that offered employer-sponsored coverage. With his ACA health plan renewal coming up for 2025, Steve wasn’t sure what these changes meant for his coverage or how to adjust it.

If your family circumstances have shifted, like Steve’s, you also might be wondering if you should let your plan renew automatically, or look at other options? How do you know if your family dynamics have changed enough to make a difference to your current health plan or if a loss of health coverage is possible?

Why Review Your ACA Plan Before Renewing?

Family life rarely stays the same for long. Whether it’s welcoming a new baby, sending a child off to college, or navigating a marriage or divorce, changes in family dynamics can have a big impact in a lot ways. One that many Texans don't always consider is how it affects your health insurance coverage.

Has your family changed as much as Steve's this year? Even if it is not quite as drastic as his, it’s essential to reassess your ACA health plan before renewing for 2025. It may feel convenient to let your current plan automatically renew, but that could mean losing essential coverage for adult children, missing out on better coverage, or missing out on more affordable health coverage options that better match your new situation. Steve had a lot going on, and it all matters when looking at what health insurance policy he should consider.

Why Family Changes Affect Your Marketplace Coverage

ACA marketplace plans are designed to accommodate different family situations at their very core. However, it is important to note that changes in your household structure can significantly affect both your coverage and costs. For example, Steve’s family changes included a child aging out of dependent coverage and his wife gaining access to employer-sponsored insurance. These events mean Steve’s family needs are very different now, and sticking with last year’s plan will not make sense.

Here are some common family changes that can impact your ACA plan:

• Marriage or Divorce: Getting that marriage certificate or having a divorce is a big deal for many reasons. It may be off your radar, but this life-changing event dramatically changes who can be on your policy and monthly premiums. These affect how your household income and eligibility for subsidies are processed.
• New Children: Whether you’ve had a new baby, are providing foster care, or bringing adoptive children, you’ll need to adjust your coverage to include them. These special qualifying events trigger special enrollment periods and change your family's plan needs drastically.
• Aging Out of Dependent Coverage: As Steve was experiencing, when a child turns 26 they’re no longer eligible to remain on your plan. This meant that his child needed their own policy and the calculations for premium subsidies for each of them changed.

There are other major changes that can cause the need to evaluate how your family plan works. Adjusting your ACA coverage to reflect these life events is essential for ensuring adequate care and aligning with your family’s budget.

Financial Impacts of Family Changes on Your Current Coverage Through The ACA

When your family size or structure changes, so does the financial side of your marketplace application for health insurance. These applications are completed each year and can unexpectedly change your health care costs. Steve knew that things were going to change, but he wasn't prepared for all of them.

• Premium Subsidies: Your household income determines your eligibility for premium subsidies under marketplace plans. If your income increases or decreases due to family changes like a spouse starting a new job or losing a job, your subsidy amount could shift. For example, Steve’s wife gaining employer coverage will reduce their eligibility for subsidies. This caught him off-guard.
• Out-of-Pocket Costs: Adding family members, such as new children, can increase your deductible and out-of-pocket costs. On the other hand, removing dependents (like Steve’s son turning 26) might lower those costs. Beyond that, your qualifications for cost-sharing reductions may also be awarded or taken away. All of these can change your out of pocket costs.
• Tax Implications: Another aspect that Steve was unaware of is how not reporting these changes in a timely fashion could impact his tax return for the next year. Dramatic changes in household make up or income can allow the government to pull back those subsidies on your tax return. Steve wanted no part of that!

To avoid surprises, it’s important to review how these family changes impact your premiums and subsidies as you renew your plan. Working with an experienced health agent can help you avoid these pitfalls.

Common Mistakes to Avoid When Renewing Your ACA Plan After Family Changes

Now that Steve had learned what could happen with all of his family changes, he wanted to make sure that he didn't suffer the consequences of poorly navigating the health insurance marketplace as he approached the open enrollment period. He was able to isolate three key things that could ultimately result in a loss of insurance for either him or his family members.

• Letting the Plan Auto-Renew: At this point, Steven knew that this option would end poorly. His 26 year old would be left without coverage, and his spouse's ability to get employer-sponsored health coverage was going to limit her ability to be on an individual plan with him.
• Failing to Update Household Income or Dependents: Now that he was updating his information with the health insurance marketplace,  he realized that his subsidy was changing as well. He needed to compare the cost of a plan from the health insurance marketplace against the cost of the job-based coverage his wife had available.
• Not Considering Health Needs: While Steven and his wife did not have need for pediatric or maternity care, they realized that finding in-network care on his wife's plan was much easier than the plans on the federal health insurance marketplace. Since Steve had a chronic condition, this was important to them.

Steve had one final question though, before he came to a conclusion. He wanted to know if he had any options for alternative health coverage outside of employer-based plans and the marketplace. This is a common questions from many Texans in his shoes.

Exploring Alternative Coverage Options After Family Changes

While ACA plans are a good fit for many Texans, many people like Steve are looking for new coverage options they may not have considered before. Steven was worried about potential gaps in coverage, but figured it was worth a question. And we certainly agreed.

• Private Health Insurance Plans: Since Steve was not going to be able to access a premium subsidy, these private health plans can make sense. They can be less expensive because they may not include all of the bells and whistles of more traditional coverage. Unfortunately, the underwriting guidelines excluded his ability to qualify.
• Catastrophic Coverage: Many Texans are turning to direct primary care doctors to manage most of their day to day medical care. They find paying cash for this care suits their health care budget if they can find suitable coverage for major events. Catastrophic health plans fit this bill and do not come with massive deductibles like some people believe.
• Short-Term Plans: Short-term plans are designed to bridge gaps between policies. The rules on these plans change frequently and can sometimes be useful for more than just transitional coverage after major life events, like a divorce or job loss. But you have to be careful though because they often don’t offer as many benefits as ACA plans and you can be non-renewed outside of enrollment windows leaving you in a bad spot.

Always explore all your coverage options to ensure your family is properly insured and you’re getting the best deal possible. But make sure you understand the fine print and how in-network care does and does not work with any of these or other alternatives for health insurance in Texas.

What To Do For Your 2025 Plan After Family Changes

Steve knew he needed help with his plan selections and updating his information. The last thing he wanted to do was mess this up. The steps that he took with his helpful 

1. Work With An Independent Agent: As Steve quickly found out, the options for covering your medical care in a comprehensive fashion are vast. Working with an independent agent allows you to understand all of your options available.
2. Document Your Family Changes: Lay all of your cards on the table with the agent you choose to work with. This will allow them to find the best range of insurance providers available to meet your needs and circumstances.
3. Recalculate Your Household Income and Dependents: Update the details on your family to adjust your premium subsidies on an ACA Plan, reflecting any changes in household size or income.
4. Compare Plans: Look at alternative ACA plans to determine if there’s one that better suits your changed family structure. With new tiers and options each year, a different plan might offer better value.
5. Confirm Your New Plan: Once you’ve reviewed the changes and selected the best plan, update your provider network and essential health benefits to ensure your family is still covered.

Remember, it’s crucial to take action during the open enrollment period or during a Special Enrollment Period, triggered by major life events like marriage, birth, or job loss.

How True Texas Health Insurance Can Help You Navigate Family Changes and ACA Renewal

Navigating ACA renewals can be complex, especially when family changes come into play. That’s where True Texas Health Insurance steps in. The experienced brokers at Insurance For Texans understand the intricacies of ACA plans and how major life events like marriage, birth, or a child turning 26 can impact your coverage. We use this knowledge to help you craft a plan that fits your need for affordable health insurance that works for you.

True Texas Health Insurance tailors health insurance options to meet the unique needs of Texas families. Whether you’re dealing with a family change or simply exploring new coverage options for 2025, we’ll guide you every step of the way to ensure you have the right plan. Just like we have with Steve.

Your family’s health needs are too important to leave to chance. Don’t let changes in your family situation impact your coverage without reviewing your options. Click the button below to see how your new situation affects your ACA options for 2025!