How Health Benefits Work

Frequently Asked Questions

How you sign up depends on the type of coverage you get:

  • For Medicaid and Freedom to Work, you can apply:
  • For Medicare, you automatically get coverage if you’ve been getting SSDI for two years. Otherwise, you may need to sign up.
  • For employer-sponsored coverage, talk to your employer’s Human Resources department.
  • For individual coverage, apply at Healthcare.gov. Healthcare.gov first checks if you qualify for Medicaid and, if not, lets you compare individual plans and see if the government will help with tax credits.

You can qualify for Medicaid if your family’s income qualifies, even if your job offers insurance.

You cannot get subsidies for purchasing an individual health plan through Healthcare.gov if your job offers you affordable insurance.

In most cases, no. The actual medical coverage you get from Medicaid is the same, no matter how you qualify. Generally speaking, the big difference is that people with disabilities get extra ways to qualify and, if you have a disability and start working, you can earn a lot more while still getting Medicaid coverage through Freedom to Work.

For income-based Medicaid, the main income rules are:

  1. If your family’s income is at or under 138% of the Federal Poverty Guidelines (FPG) ($17,774 per year for an individual; $36,570 for a family of four), you may qualify.
  2. If you are 18 or younger and your family’s income is at or under 217% of FPG ($57,505 per year for a family of four), you may qualify.
  3. If you are pregnant and your family’s income is at or under 200% of FPG ($53,000 per year for a family of four), you may qualify. The unborn baby is counted as a family member.

Income-based Medicaid is based on your Modified Adjusted Gross Income (MAGI), which includes most of your earned and unearned income. (That's why some people call it "MAGI Medicaid.") MAGI doesn't include some types of income, like Supplemental Security Income (SSI) benefits and some contributions to retirement accounts. Learn more about what types of income affect income-based Medicaid eligibility.

If you have a disability, you may be able to get Medicaid coverage if your income is a lot higher than this, thanks to the Freedom to Work program. Once you have Freedom to Work coverage, you can keep your coverage no matter how much you earn. Learn more about Freedom to Work.

Health Coverage Income Limits for Your Family

It depends on your situation:

  • Undocumented immigrants do not qualify for full Medicaid coverage, but may qualify for Medicaid coverage for emergency services.
  • Most immigrants who have been lawfully present for less than five years do not qualify for full Medicaid coverage. However, they may qualify for private coverage subsidized by the government.
  • Immigrants who have been lawfully present for five years or longer and some other noncitizens who meet specific noncitizen requirements qualify for the same programs that U.S. citizens can get.

There are different health coverage options as your income goes up:

  • Depending on how much your income goes up, your Medicaid may continue, unchanged.
  • If you got Supplemental Security Income (SSI) before you started earning more, you can usually keep Medicaid thanks to SSI’s 1619(b) rule.
  • If you have a disability and work, you can also consider the Freedom to Work program, which offers Medicaid coverage if you pay a monthly premium. Once you are covered by Freedom to Work, you can keep your coverage no matter how much you earn.
  • If your employer offers it, you may be able to get employer-sponsored coverage.
  • If your employer does not offer coverage, you should consider private individual coverage. You may get government help to pay for an individual plan on Healthcare.gov. Note: For 2021 and 2022, there is no income limit for getting subsidies that help pay individual coverage premiums. (The limit used to be 400% of FPG.) To get subsidies, you still must meet other eligibility rules and the premium amount you pay depends on your income and your plan.

The bottom line: There is a coverage option for almost everybody. Do not worry that getting a job will leave you without health coverage.

To qualify for Medicaid's Freedom to Work program, you must:

  • Be 16 – 64 years old, live in Michigan, and be a U.S. citizen or a qualified immigrant
  • Be working
  • Have a disability that meets Social Security’s medical standards. (SSA’s disability rules related to earned income do not apply.)
  • Have limited income (only your income is counted, not the income of other household members)
    • When you apply, you must have countable income at or below $2,683 per month.
      • Freedom to Work counts earned income and unearned income differently. Only about half of your earned income is counted, so you could work and make a lot more than the $2,683 limit and still qualify, depending on your unearned income.
    • After Freedom to Work coverage starts, your unearned income must stay at $2,683 per month or less. Once your coverage starts, it doesn't matter how much you earn, as long as you have some earned income.
  • Have limited countable resources (money in an ABLE account, the house you live in, and one car are not counted):
    • When you apply, you must have less than $7,970 in resources.
    • After Freedom to Work coverage starts, you can have up to $75,000 in resources. Note: After coverage starts, money you put in an Individual Retirement Account (IRA), 401(k), or 403(b) while you are working does not count towards the limit.

You have to pay a monthly premium to get Freedom to Work coverage in any month where your income is higher than $1,481 (if you are single). The more income you have, the higher your premium. To learn how much your premium might be, try DB101's Freedom to Work Estimator.

Medicare has three main parts:

  • Medicare Part A helps pay for medical care you get while you’re in a hospital.
  • Medicare Part B helps pay for medical care you get outside of a hospital.
  • Medicare Part D helps pay for prescription drugs.

Medicare Advantage (also called Medicare Part C) is a way to get a single combined plan including Parts A, B, and D through a private company. With Medicare Advantage plans, you may have less flexibility, but your costs could be lower.

If you or your spouse worked enough time while paying Medicare taxes, you qualify for Medicare Parts A and B:

  • When you turn 65
  • When you’ve been getting Social Security Disability Insurance (SSDI) benefits for two years, or
  • If you have Lou Gehrig’s disease (amyotrophic lateral sclerosis, or ALS) or end-stage kidney disease (ESRD).

Note: If your disability began before you turned 22 years old and you get Disabled Adult Child (DAC) benefits for two years based on a parent’s work record, you start getting Medicare.

No. Medicare only helps pay for care that it considers reasonable and necessary. If you need a service that Medicare doesn’t cover, you have to pay for it yourself, unless you have other coverage, such as Medicaid, employer-sponsored coverage, or a Medicare supplement (Medigap) policy.

For certain services, you pay a deductible, copayment, or co-insurance before Medicare begins to help pay for that service. For Medicare Part B or Part D, or for Medicare Advantage, you may have to pay a monthly premium.

You may qualify to get help paying for your Medicare premiums, copayments, and deductibles if you have low income. Medicare Savings Programs help pay for Part B coverage and the Low Income Subsidy (LIS) helps pay for Part D coverage.

Yes. Other coverage that you can have with Medicare include:

Learn more about how Medicare interacts with other types of coverage.

You may pay nothing, a percentage of the cost, or whatever amount your employer doesn't pay.

Employers are supposed to offer plans that cost the employee, for the employee’s policy alone, less than 9.5% of the employee’s family income for the monthly premium. Also, that coverage must meet bronze-level standards for copayment, co-insurance, and deductible expenses.

If your employer offers a plan that does not meet these standards, you may qualify for government help through tax subsidies to reduce the premium on an individual plan.

Note: The coverage your employer offers must meet affordability standards for the employee, but not for the family. It may be very expensive for family members to join an employer-sponsored health plan. Even so, anybody who can get employer-sponsored coverage, even if it is not affordable for the family member, does not qualify for tax subsidies to buy an individual plan on Healthcare.gov.

Yes, if you are under 26 and cannot get health coverage through your own employer. Employers who offer coverage to their employees must also offer it to their children under the age of 26.

Employers do not have to offer coverage to the spouses of employees, but many do.

Note: While employers must offer this coverage to children, the employee may be required to pay for all of it.

Yes. Plans cannot deny people coverage. When you apply for insurance, they cannot reject your application and they cannot say that they won’t cover medical needs related to your disability. They also cannot charge you more because you have a disability.

Additionally, all plans must cover the Essential Health Benefits (EHBs), which means that they offer comprehensive coverage, including chronic disease management, rehabilitative and habilitative services and devices, and mental health and substance abuse coverage, just to name a few.

Depending on your situation, you may qualify to have the government help pay for your individual health plan through tax credits. Here's how it works:

  1. When you sign up at Healthcare.gov, you give details about your family's situation. Healthcare.gov reviews that information instantly. If your family qualifies for government help to pay for individual coverage, Healthcare.gov tells you and lists insurance options for you.
  2. Your insurance options list the full cost of the monthly premium, how much of that premium the government pays each month, and how much you pay each month. The government helps pay for the premium by giving you a tax credit every month, so you don't have to think about it during the year. All you have to do is make sure you keep paying your part of the premium.
  3. In January or February, the government sends you a form listing your total health coverage tax credits for the previous year. You need this form at tax time, because it is possible the government paid more or less than it should have for your health coverage. If so, this is sorted out when you file your taxes.

No, but depending on your income, you may get more help from the government if you get a silver-level plan:

  • The government may help pay for your premium through tax credits. That means you would pay less each month. You might get this help no matter what metal your plan is.
  • If you make 250% of the Federal Poverty Guidelines (FPG) or less and get a silver plan, the government also pays to reduce your copayments, co-insurance, deductible, and out-of-pocket maximum. That means you pay less each time you need medical services. If you get this help, your silver plan might actually be as good or better than many platinum or gold plans. If you do not get a silver plan, the government does not help you with these expenses.

When Healthcare.gov looks at your income, they count most of your earned and unearned income. However, some income is not counted, including Supplemental Security Income (SSI) benefits and some contributions to retirement accounts. Learn more about what types of income affect whether you get help paying for individual coverage.

Health Coverage Income Limits for Your Family

Usually, when you sign up for a plan through Healthcare.gov, you need to stay on the plan for the entire calendar year. So, if you are signed up for 2021, then you can’t leave that plan until 2022.

However, in certain situations you may be able to change plans mid-year:

  • If your income changes and you gain or lose eligibility for government help paying for your coverage
  • If your health provider is not meeting its obligations
  • If you move, or
  • In other life-changing circumstances, such as having a child or getting married.

The first one is the key. If your income goes down and you can’t afford your plan anymore, report your change in income to Healthcare.gov. You may qualify to get Medicaid or to have the government increase how much it pays for your current insurance (meaning that you have to pay less).

Note: American Indians do not have these restrictions and can change up to once a month.

Learn more