Affordable Care Act (ACA) subsidies, also called premium tax credits, help millions of Americans pay for health insurance. These subsidies lower monthly premiums and make coverage affordable. But many ask the same question each fall: do you need to reapply for ACA subsidies every year?

The short answer is yes. Subsidies don’t last forever without action. You must confirm your details every year to keep them. This is called the ACA subsidy renewal process. Renewal ensures your income, family size, and household information are accurate. It also keeps you safe from surprise tax bills later.

In this blog, we’ll break down how annual ACA subsidy verification works, the steps in the health insurance marketplace renewal process, whether subsidies renew automatically, and why it is vital to update income for ACA subsidies every year.

What Is ACA Subsidy Renewal?

ACA subsidy renewal is the process of checking if you still qualify for help paying premiums. These subsidies come as advance premium tax credits, and they are based on your income and household size. Because income and family situations can change, the government requires you to confirm them every year.

If you do not renew, the Marketplace may roll over your plan automatically, but the subsidy amount may be wrong. That can leave you paying too much, or worse, owing money when you file taxes.

Why renewal matters:

• Keeps coverage active.
• Adjusts the subsidy to your real income.
• Prevents IRS payback for overpaid credits.
• Ensures the plan you choose still fits your health needs.

Annual ACA Subsidy Verification Explained

Every fall, the Marketplace runs annual verification checks. They compare what you reported last year with updated IRS tax data. This is called annual ACA subsidy verification.

The system looks at:

• Household income.
• Number of dependents.
• Filing status (single, married, head of household).
• Lawful presence or citizenship changes.

If they see differences, they may reduce your subsidies until you provide proof. You may get a notice asking for tax documents, pay stubs, or Social Security income records. If you don’t respond, subsidies may stop mid-year.

Example: If you made $40,000 last year but now earn $55,000, the subsidy will shrink. If you now earn $30,000, the subsidy will increase. Verification makes sure the right amount is applied.

The Health Insurance Marketplace Renewal Process

The health insurance marketplace renewal process happens during open enrollment each fall. Here’s how it works step by step:

1. Log in to your HealthCare.gov or state Marketplace account.
2. Check your current plan and subsidy details.
3. Update your income and household info. Add new dependents, remove those who no longer qualify, or update job changes.
4. Upload the requested documents if asked for proof.
5. Choose your plan for the new year. You can keep the same one or shop for a new plan.

If you don’t take these steps, the Marketplace may use old information to renew your plan. That can leave you with the wrong subsidy and the wrong coverage.

Do ACA Subsidies Renew Automatically?

Many wonder: Do ACA subsidies renew automatically? The answer is sometimes, but it’s risky.

• Yes, auto-renewal can happen. If you don’t log in, the Marketplace may roll your plan into the new year with last year’s subsidy data.
• But it’s not safe. Old income data may not reflect reality. If you earned more than expected, you may owe money. If you earn less, you may lose savings you deserve.
• Plans change. Insurance companies adjust networks, premiums, and benefits each year. The plan you had may not be the best fit anymore.

That’s why experts recommend always actively renewing. Automatic renewal can leave you paying more than necessary.

How Long Do ACA Subsidies Last Each Year?

ACA subsidies are not permanent. They last for one coverage year only. That means the help you get in 2024 ends on December 31, 2024. To keep subsidies for 2025, you must go through the ACA subsidy renewal process during open enrollment.

Key points:

• Subsidies apply January through December.
• Renewal is required each fall for the next calendar year.
• Income and household updates decide if subsidies change.

So while ACA subsidies continue as long as the law exists, your eligibility resets yearly.

Why You Must Reapply for Premium Tax Credits

Premium tax credits aren’t permanent. You must reapply every year. Why? Because subsidies are forward-looking. They estimate next year’s help based on your projected income.

Reasons to reapply:

• Income changes. A raise, a new job, or a job loss all affect eligibility.
• Family changes. Marriage, divorce, or having a baby alters household size.
• Tax filing. You must file taxes to keep subsidies. Not filing makes you ineligible.
• Avoid debt. Wrong estimates mean you could owe money back.

Think of reapplying as resetting the system for accuracy.

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ACA Open Enrollment Renewal Requirements

Open enrollment is your chance to act. For 2025, ACA open enrollment runs November 1, 2024, through January 15, 2025.

You must:

• Update income and household information.
• Choose your health plan.
• Submit any requested documents.

If you miss open enrollment, you may be locked out until the next year unless you qualify for a special enrollment period (SEP). SEPs are triggered by life events like marriage, divorce, birth of a child, or job loss.

Update Income for ACA Subsidies

Income drives subsidy eligibility. Each year, you must update your income for ACA subsidies to reflect your current financial situation.

Include:

• Wages and salaries.
• Self-employment income.
• Social Security.
• Unemployment benefits.
• Investment income, like dividends and interest.

If you don’t report correctly, you may face IRS repayment. Accurate reporting protects your wallet and maximizes savings.

Example: Someone reports $35,000 income but actually makes $50,000. They’ll receive too much subsidy and must repay thousands at tax time.

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What Happens If You Don’t Renew?

Skipping renewal has consequences.

• Subsidies may stop. Without renewal, your plan may continue but without financial help.
• Premiums rise. You could suddenly owe full price each month.
• IRS repayment. If data shows you earned more than reported, you must repay excess subsidies.
• Coverage loss. In some cases, your plan may be terminated.

The risk is clear: ignoring renewal is costly. A study found that if enhanced ACA premium tax credits expire or if people fail to renew, premiums could more than double for many enrollees. This shows why ACA subsidy renewal is critical. Without updated information, families may lose hundreds of dollars in monthly savings, making coverage far less affordable.

Common Mistakes People Make During ACA Renewal

One of the biggest issues people face during open enrollment is making ACA subsidy application mistakes. These mistakes can cost you money, delay coverage, or even cancel your subsidies. Renewing subsidies may sound simple, but many people make mistakes that cost them money. Here are the most common:

• Relying on auto-renewal. Plans change, and subsidies adjust. Auto-renewal can lock you into higher costs.
• Not updating income. Forgetting to report raises, job loss, or new income leads to IRS repayment or missed savings.
• Missing deadlines. Open enrollment is strict. If you miss it, you may be stuck without subsidies.
• Ignoring document requests. Failing to send proof (like pay stubs) can cancel subsidies mid-year.

Avoiding these mistakes keeps your ACA subsidy renewal smooth and safe.

Conclusion

ACA subsidy renewal is required each year. While auto-renewals exist, they are not safe. To protect yourself, always update income, confirm household details, and actively reapply for premium tax credits.

Prime Life Financial helps individuals and families complete renewals with confidence. With expert guidance, you avoid mistakes, prevent IRS debt, and keep your coverage affordable.

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FAQs

Do you have to apply for ACA every year?
Yes. Subsidies are tied to annual income and tax filings, so you must renew during open enrollment.

How long will ACA subsidies last?
They last as long as the ACA remains law. Eligibility is checked annually.

How does the ACA subsidy work?
It lowers monthly premiums by giving you advance tax credits based on income and household size.

What are the requirements to be eligible for subsidies?
You must buy insurance through the Marketplace, meet income limits, and file taxes. Lawful presence is also required.

References

Kffcarenec. (2025c, August 9). Explaining health care reform: Questions about health insurance subsidies. KFF. https://www.kff.org/private-insurance/explaining-health-care-reform-questions-about-health-insurance-subsidies/

Eligibility for the Premium Tax Credit | Internal Revenue Service. (n.d.-b). https://www.irs.gov/affordable-care-act/individuals-and-families/eligibility-for-the-premium-tax-credit