Open health insurance enrollment: What it means for your taxes
When you work for yourself, the stakes of open enrollment are much higher than they are for someone on an employer-sponsored plan.
Three decisions you make during the Open Enrollment Period (OEP) affect your tax return:
- Your income estimate: The Marketplace uses your income estimate to set your Advance Premium Tax Credit (APTC). Guess too low, and you’ll have to pay back the excess credit when you file your tax return.
- Your plan: Your premiums may qualify for the self-employed health insurance deduction. The right type of plan can also let you make tax-deductible contributions to a health savings account (HSA).
- Whether you enroll: Some states charge a penalty if you go without coverage.
So how does the ACA tie into your taxes?
Once you have Marketplace coverage, if you get an Advance Premium Tax Credit, it links your health plan to your tax return. When you file, you compare the advance credit paid during the year with the credit you actually qualify for. The numbers come from Form 1095-A.
You have to file a return if you received advance credit payments, even if your income falls below the normal filing threshold, Intuit TurboTax reports.
What’s changing for 2026-27 and why your premium jumped
The enhanced premium tax credits that made Marketplace plans cheaper from 2021 through 2025 expired at the end of 2025. As a result, average out-of-pocket premiums rose 58% in 2026, according to the KFF (Kaiser Family Foundation). Insurance companies also raised health insurance premiums by an average of 20% in 2026 and are proposing an average of 15% for 2027.
Without the enhanced credits, if your household income exceeds 400% of the federal poverty level, you don’t qualify for a premium tax credit. Going even $1 over that line costs you the entire credit.
If your income is close to the line, deductions that lower your modified adjusted gross income (MAGI) may help you stay eligible for an advance premium tax credit. Learn more about how the premium tax credit works and how to stay eligible.
How your plan choice shows up on your tax return
Form 8962 calculates the difference between the credit you received during the year and the credit you qualify for once you know your actual income for the year. If you’re a W-2 employee with steady paychecks, the gap is usually small. If you’re self-employed, your income might rise and fall from quarter to quarter, so the difference can be big.
Starting with 2026 returns (the ones you file in 2027), you repay any excess advance credit in full, with no cap. So if a strong fourth quarter pushes your household income over 400% of the federal poverty level, you repay the full credit.
To avoid a big bill at tax time, update your income with the Marketplace within 30 days of an income change. You might also consider taking less than the full advance credit and claiming the rest when you file your tax return.
The tax forms you’ll need
If you have a Marketplace plan, the federal platform or a state-based marketplace exchange will mail you Form 1095-A and post it to your online account by January 31 of the following year.
It lists your monthly premiums, the benchmark plan cost, and any advance credit paid on your behalf. All three numbers feed directly into Form 8962.
Check the form before you file. If it has the wrong household members, coverage months, or benchmark premium, ask the Marketplace for a corrected copy. Wrong numbers can affect your credit and trigger an IRS notice.
If your spouse has employer coverage, you may also receive Form 1095-B or 1095-C. You don’t have to wait for either one to file.
Don’t leave this deduction on the table
If you pay for your own health insurance as a self-employed person, you can generally deduct the premiums you pay for yourself, your spouse, and your dependents. You claim the deduction using Form 7206 and Schedule 1, and you don’t need to itemize.
With premiums rising, this deduction can be worth more when you file your tax return. Just keep two limits in mind. First, your deduction can’t exceed your net business profit. Second, you can’t take the deduction for any month you were eligible for an employer-subsidized plan, including one through your spouse’s job.
Driving, delivering, or freelancing through a platform?
In California and Massachusetts, app-based rideshare and delivery drivers may qualify for a health insurance stipend from their platforms.
You can receive a stipend and a premium tax credit at the same time, but the stipend counts as business income, so include it in your income estimate and on your tax return.
Exemptions, penalties, and what happens if you skip coverage
Congress cut the federal penalty for going without health insurance to $0 starting in 2019, so skipping coverage won’t affect your federal return. However, California, Massachusetts, New Jersey, Rhode Island, and the District of Columbia may charge a penalty on your state or district return.
If you skipped coverage in one of these states, you may qualify for a state exemption, for example, if your coverage gap was short or the coverage available to you would have cost more than a set share of your income.
Exemptions aren’t automatic. You have to claim them on your state return.
Missed the window or had a life change?
If you miss the enrollment deadline, you must qualify for a Special Enrollment Period to get coverage at a later date. Common qualifying life events include losing health coverage after leaving a job, moving to a new area, getting married, or having or adopting a child.
If you don’t qualify for a Special Enrollment Period, you can still apply for Medicaid or the Children’s Health Insurance Program (CHIP) any time of year.
Quick reference checklist
During open enrollment
- Enroll by Dec. 15 for coverage that starts Jan. 1 (Deadlines for state exchanges may differ).
- Estimate your household income using net self-employment income, and include any platform health stipend.
- If you want to contribute to an HSA, make sure your plan is a high-deductible health plan (HDHP).
During the year
Update your Marketplace application within 30 days of a significant income or life change.
When you file your tax return
- Watch for Form 1095-A by Jan. 31 and check it for errors.
- File Form 8962 to calculate your premium tax credit and compare it to the Advance Premium Tax Credit you received.
- Report any health care stipends you received as business income.
Mark your calendar
Open enrollment for 2027 coverage runs from Nov. 1, 2026, through Jan. 15, 2027, on HealthCare.gov. If you enroll by Dec. 15, your coverage starts on Jan. 1. The final deadline to sign up or change plans for 2027 coverage is Jan. 15, 2027, for coverage starting Feb. 1.
If your state runs its own exchange, your dates may be different. The chart below shows the states with their own deadlines. If your state isn’t listed, then the federal open enrollment timeline applies.
This story was produced by Intuit TurboTax and reviewed and distributed by Stacker.
