| Blog

What MAGI Has to Do With Individual Health Insurance

Written by: Christina Merhar
September 4, 2015 at 12:00 PM

MAGI and Individual Health InsuranceModified Adjusted Gross Income, or MAGI, is one of the federal government’s income calculations to determine eligibility for various tax credit and assistance programs.

So, what does it have to do with individual health insurance?

If you and your small business employees have individual health insurance policies, it’s an important measurement to understand.

Note - This article is from our free eBook, The Small Business Owner's Guide to Modified Adjusted Gross Income. To access the complete resource, click here.

MAGI and Individual Health Insurance

If you’re one of the thousands of small business owners who is unable to afford traditional group health insurance, you might be reimbursing your employees for all or a portion of their premiums, or sending them to the Individual Health Insurance Marketplace. If this is the case, it’s important you understand MAGI.


Employees often ask their employer questions about health insurance options, terms, or for direction. And as your employees purchase individual health insurance, they may ask you what MAGI is or how to calculate it to determine if they are eligible for premium tax credits.

As such, it’s important you are a knowledgeable source and can both point them in the right direction, and explain what MAGI is and how it is used.

Resources to Understand MAGI


By understanding how to calculate MAGI, you will better understand eligibility for premium tax credits, as well as Medicaid eligibility, retirement savings deductions, education tax credits, and adoption tax credits.

What questions do you have about MAGI and individual health insurance? Download the PDF guide, or leave a comment below.

Topics: Individual Health Insurance, Modified Adjusted Gross Income