I am a housewife. My husband passed away last year and I and my 2 kids, aged 6 years old and 4 years, are earning survivor’s benefits from my husband’s social security. I tried applying for insurance from the marketplace, but got rejected. What is the qualified income for me to be able to get obamacare under my circumstances? I am still not working and I am surviving on my husband’s monthly survivor’s benefits.
When you apply for the Marketplace or Medicaid your eligibility is based on total household income, this Includes income from survivor's benefits. With that said, the rules are a bit complex and whether or not income is included depends on other taxable income.
There are a few key points to understand here:
First off, survivor benefits can have some complicated tax rules. As a rule of thumb, if the benefits are taxable, they count toward MAGI for the marketplace and Medicaid, and if they aren't they do not. However, there are some exceptions and those exceptions can differ between the Marketplace and Medicaid (see details). If you need assistance in figuring out what you qualify for, you can always contact the marketplace or your local social security office for help!
Second, as a rule of thumb, Social Security income specifically is counted toward MAGI for ObamaCare and thus affects tax credits and Medicaid eligibility if a person has to file taxes. Social Security Income includes disability payments (SSD and SSDI), pension, retirement benefits, and survivor benefits, but does not include supplemental security income (SSI). (Line 20a minus 20b on a Form 1040). In general, everything except for SSI counts toward MAGI for ObamaCare and Medicaid.... however, it can be the case that a child doesn't have enough other taxable income for it to count (see specific rules for children here: https://www.irs.gov/faqs/social-security-income/survivors-benefits/survivors-benefits).
Therefore, as a rule of thumb, survivor benefits will count toward taxable income for the purposes of assistance with healthcare in many cases (in most cases where those benefits are taxable).
All of that said, there is one more thing to consider here in terms of Medicaid specifically: If your state did not expand Medicaid you may not have a lot of options if taxable benefits won't put you over the threshold. We suggest those with low incomes, who live in states that didn't expand Medicaid, to apply for Medicaid and use their rejection letter to apply for an exemption in the Marketplace.
TIP: You can use the marketplace no matter what as long as you don't qualify for Medicare. Meanwhile, if you qualify for Medicaid the marketplace will let you know. So even if you don't get tax credits, you should still contact the marketplace to inquire about coverage.