The client who calls in November asking why the APTC is wrong usually had the wrong income on the intake form. Not wrong by intent. Wrong because the broker pulled last year's tax return and entered it without asking about the January raise, the freelance work started in April, or the spouse who went from full-time to part-time in June. The intake conversation has two purposes. One is getting the quote right. The other is building the record that protects the broker when the quote turns out to have been wrong anyway.
Key Takeaways
- The intake conversation captures two things with different consequences: the inputs that drive the quote and the documentation that protects the broker. Getting the inputs wrong produces a bad quote. Missing documentation creates E&O exposure.
- Projected MAGI for the current year is the correct income figure, not the prior year's tax return. Brokers who enter last year's number without checking for income changes set the client up for an APTC reconciliation event on Form 8962.
- The employer affordability test is not optional for clients who have access to employer coverage. If the offer meets minimum value and is below the IRS employee contribution threshold, the client cannot receive APTC during months they decline it.
- Tobacco use must be documented with a yes or no answer because the surcharge is not offset by APTC. In states that permit the 1.5x tobacco rating, a subsidy-eligible tobacco user pays the full surcharge out of pocket.
- Household size and income are separate conversations with different rules. Married filing separately eliminates APTC eligibility entirely. A dependent claimed on another return must be handled carefully when building the application household.
The fields that drive every downstream number
ACA quoting has seven data inputs that determine everything: the APTC amount, the CSR tier, whether the client is eligible for any subsidy at all, and which SEP rules apply. Missing or estimating any of them produces a quote that may be directionally correct but wrong at the level of actual monthly premium.
| Intake field | Why it matters | Common error |
|---|---|---|
| Projected MAGI — current calendar year | Drives APTC amount and CSR tier. CMS uses the projection you enter, not last year's actual. | Entering prior-year AGI from the tax return without adjusting for known income changes. |
| Employer coverage offer and cost | If the offer meets minimum value and the employee share is below the IRS affordability threshold, the client is not APTC-eligible. | Skipping the question because the client said 'I don't want my employer plan.' |
| Tobacco use (yes/no) | In states permitting the surcharge, tobacco users pay up to 1.5x the base rate. APTC does not offset the surcharge. | Leaving the field blank or assuming the client will self-report at enrollment. |
| Household members and filing status | ACA household follows the tax household: filer, spouse if filing jointly, claimed dependents. Married filing separately eliminates APTC. | Counting physical household occupants instead of the IRS tax household definition. |
| SEP trigger event and date | The 60-day SEP window runs from the qualifying event, and documentation must be submitted within 30 days of enrollment. | Recording only 'loss of coverage' without the specific date or the source of coverage lost. |
| Social Security or SSDI income | SS income enters MAGI at the gross amount before Medicare Part B deductions, not the net deposit amount. | Using the Medicare premium-reduced deposit amount rather than the gross benefit amount. |
| Self-employment net income | Self-employed clients report net profit after business deductions, not gross revenue. | Using gross revenue from the Schedule C top line, which overstates MAGI and reduces APTC. |
The employer offer test: the question most brokers skip
The ACA affordability test for employer coverage determines whether a client with access to an employer plan can receive APTC. If the employer offers a plan that meets minimum value, and the employee contribution for self-only coverage is below the IRS affordability threshold for the year, the client is not eligible for APTC during months they are enrolled in or decline the employer plan.
The problem in practice: a client says "I don't want my employer plan" and the broker quotes Marketplace coverage without asking about the offer. The client enrolls with APTC. Six months later, the Marketplace sends an income inconsistency notice. The employer plan information is pulled from IRS data, the affordability test is run retroactively, and the APTC is determined to have been incorrectly applied. For the full affordability test methodology and the IRS threshold, read ACA employer coverage affordability test.
The intake question is not "Do you have employer coverage?" It is "Does your employer offer you coverage, and if so, what is your share of the lowest-cost self-only plan?" The difference in framing produces different answers. A client who has declined employer coverage may answer "no" to the first question and accurately answer the second. The test only runs when both pieces of information are collected.
Income: the projection is the job, not the lookup
The most common intake error is entering a prior-year figure without adjusting for changes that occurred between January 1 and the enrollment date. The APTC is based on projected current-year MAGI, which the client attests to on the application. CMS accepts the projection and reconciles against actual income at tax time through Form 8962.
The broker's role at intake is not to certify the income. It is to help the client arrive at a reasonable projection based on what they know about their year. The tax return is a starting point for the conversation, not the answer. For the full list of income types that enter MAGI and the ones that do not, read ACA MAGI income types for brokers.
Social Security income deserves a separate question from wage income. The gross SS benefit amount enters MAGI, not the deposit amount after Medicare Part B deductions. A client whose gross benefit is $1,800 per month but who receives $1,610 after the Part B premium deduction has MAGI from SS of $21,600 annually, not $19,320. At the boundary between Medicaid expansion eligibility and Marketplace eligibility, this difference changes the outcome.
Tobacco use: the question that must have an answer
In states that permit the tobacco surcharge under 45 CFR 147.102, carriers can charge tobacco users up to 50 percent more on the gross premium. The APTC is calculated on the non-tobacco SLCSP rate and cannot be applied to offset the surcharge. A subsidy-eligible tobacco user on a $300 gross Silver plan with a $200 APTC still pays a tobacco surcharge that can be $150 or more per month, entirely out of pocket.
The intake record must show a yes or no answer on tobacco use, not a blank field. If the broker does not ask, the carrier asks at application. The client answers honestly and sees a premium different from the quote the broker showed them. For the complete state-by-state surcharge breakdown and how CMS defines tobacco use, read ACA tobacco surcharge broker guide.
The household definition: two questions, not one
The ACA household size follows IRS tax household rules, not physical household occupancy. The household includes the tax filer, a spouse if filing jointly, and anyone claimed as a dependent on the return. Married clients who file separately cannot receive APTC. A dependent claimed on a parent's return cannot be added to the child's own application as a household member for APTC purposes.
The intake conversation should ask about household size and filing status as separate items. A household of four with two adults who file jointly and two children produces a different APTC calculation than the same family where the adults file separately. For the full household size rules and the filing status APTC interaction, read ACA household size for subsidies.
SEP intakes: date and documentation, not just event type
For clients enrolling through a Special Enrollment Period, the intake record must capture three things: the category of qualifying event, the specific date the event occurred, and the documentation the client will submit to verify it. Recording only the event type is not sufficient. The 30-day documentation window after enrollment is strict, and coverage can be retroactively terminated if verification fails.
Loss of employer coverage requires the coverage termination date and the name of the prior employer plan. Birth or adoption requires the date of the event and the applicable documentation. For the full documentation requirements by qualifying event type, read ACA SEP documentation requirements. For the E&O exposure when intake documentation is missing, read ACA broker E&O insurance and the intake documentation gap.
When to prompt mid-year income updates
CMS requires clients to report income changes that affect APTC eligibility within 30 days of the event. In practice, clients do not know this and do not call. The broker who builds a mid-year check-in into the annual workflow gets ahead of the Form 8962 problem that otherwise arrives in February.
A brief email in June asking clients to flag any income changes, new employer offers, or major life events takes five minutes to draft and fifteen seconds to send. For a 50-client book, it catches two or three situations every year where APTC was running on a projection that no longer matched reality. Those three conversations in June are less expensive than three angry calls in February.
FAQ
Questions brokers ask about structuring the ACA client intake conversation.
Should I use the prior year tax return income or ask the client to estimate?
Ask the client to estimate projected income for the current calendar year. The prior year tax return is a useful starting point to discuss, but it is not the correct figure for the Marketplace application. A client who received a raise in January, retired in March, or started a freelance business mid-year has income that may be significantly different from what appears on the prior year return. The APTC is based on a projection that the client attests to, and reconciliation on Form 8962 corrects for the difference. The broker's job is to get the projection as close to reality as possible at the time of enrollment, then remind the client to update it mid-year if circumstances change.
What documentation protects a broker if an employer coverage dispute arises?
The documentation that matters most is a written record of what you asked, what the client told you, and when. For employer coverage questions, that means documenting whether the client confirmed they were offered coverage, whether they reported the plan premium and employer contribution, whether you ran the affordability test, and what the test result was. If the client is later determined ineligible for APTC because of an affordable employer offer they did not disclose, the broker needs documentation that the question was asked. Platforms like Quotit and GetInsured log the application screens but do not necessarily capture the broker's verbal conversation. A brief CRM note or email confirmation after the intake call is the practical backstop.
How often should brokers prompt clients to update their projected income?
At minimum, twice: at enrollment and again when a major income-changing event occurs. CMS requires clients to report income changes that affect APTC eligibility within 30 days of the event. The practical problem is that clients do not know this and do not call. Brokers who send a brief mid-year check-in email in June asking clients to report any income changes get ahead of the Form 8962 reconciliation conversation that would otherwise arrive in February. The check-in also catches life events that open an SEP and give the broker a service opportunity.
What happens if a broker does not document the tobacco use question?
In states that permit the tobacco surcharge, the carrier collects the answer during application. If the broker did not discuss it with the client beforehand, the client may answer honestly at application and receive a premium that is 50 percent higher than the quote the broker showed them. That call usually comes on day one of coverage when the client sees the actual billing amount. Documenting the tobacco question at intake ensures the quote the broker presents matches the premium the client will pay. It also matters for E&O purposes if the client claims they were never informed of the surcharge.
Does documenting the intake conversation create additional liability for the broker?
Documentation is net protection, not net liability. The broker who has a written record of what was asked and what the client answered is in a far stronger position in a dispute than the broker who relies on memory or a general enrollment log. The E&O risk in ACA work most commonly arises from situations where the client claims they were never informed of something. A signed or timestamped intake record that shows the question was asked and answered transfers the attestation responsibility back to the client. Brokers without documentation tend to bear more of the dispute resolution burden.
