Money
Subsidies, FPL & the premium tax credit
Premium tax credits (APTC) are the federal subsidy that makes marketplace coverage affordable. Eligibility and amount depend on household size, income as % of FPL, and the cost of the local benchmark Silver plan.
No cost, no obligation. Brokers are paid by the carrier and can compare plans side-by-side for your situation.
Request a broker →What's new for 2027 subsidies
- 400% FPL cliff is back. Enhanced subsidies expired after 2025; households above 400% FPL get no premium tax credit.
- Expected contribution: 2.15% – 10.22% of income (up from 2.10% – 9.96% in 2026). Sourcei
- Max out-of-pocket: $12,000 self / $24,000 family (up from $10,600 / $21,200). Sourcei
- Immigration status: starting Jan 1, 2027 only certain immigration statuses qualify for premium tax credits. Sourcei
- HSA limits: $4,500 self / $9,000 family. Sourcei
| Household income (% FPL) | 2027 expected contribution *NEW 2027 |
|---|---|
| Under 133% | 2.15% |
| 133% – 150% | 3.23% – 4.3% |
| 150% – 200% | 4.3% – 6.78% |
| 200% – 250% | 6.78% – 8.66% |
| 250% – 300% | 8.66% – 10.22% |
| 300% – 400% | 10.22% |
| Above 400% | No subsidy |
2026 Federal Poverty Level (used for 2027 coverage)
Eligibility for 2027 marketplace plans uses the 2026 HHS poverty guidelines (released January 2026). Add $5,680 per additional household member above 8 *UPDATED 2027. Alaska and Hawaii use higher figures.
| Household size | 100% FPL | 150% | 200% | 250% | 400% |
|---|---|---|---|---|---|
| 1 | $15,960i | $23,940i | $31,920i | $39,900i | $63,840i |
| 2 | $21,640i | $32,460i | $43,280i | $54,100i | $86,560i |
| 3 | $27,320i | $40,980i | $54,640i | $68,300i | $109,280i |
| 4 | $33,000i | $49,500i | $66,000i | $82,500i | $132,000i |
| 5 | $38,680i | $58,020i | $77,360i | $96,700i | $154,720i |
| 6 | $44,360i | $66,540i | $88,720i | $110,900i | $177,440i |
| 7 | $50,040i | $75,060i | $100,080i | $125,100i | $200,160i |
| 8 | $55,720i | $83,580i | $111,440i | $139,300i | $222,880i |
Cost-Sharing Reductions (CSR) — Silver only
CSRs lower deductibles, copays, and out-of-pocket maximums on Silver plans when income is below 250% FPL. Native American households get zero cost-sharing on any metal tier below 300% FPL.
Lowest deductibles and copays. Effectively a platinum-level Silver.
Very low deductibles; strong cost-sharing reduction.
Modestly enhanced Silver; smaller reduction than 87 / 94.
No CSR. Bronze/Gold/Platinum may be better value.
FPL calculator — where do you land?
Enter your household details to see your income as a percentage of the Federal Poverty Level and which CSR tier you may qualify for.
Estimate only. Uses 2026 HHS poverty guidelines for plan year 2027. Final eligibility is determined by the Marketplace using verified MAGI and proof of tribal membership (CDIB, tribal ID, ANCSA shareholder documentation, etc.).
How the premium tax credit works
- You estimate household MAGI for the coverage year on your application.
- The marketplace finds your benchmark plan — the second-lowest-cost Silver plan in your area.
- The law sets an expected contribution (a % of MAGI you should pay).
- APTC = (benchmark premium) − (your expected contribution). You can apply it to any metal tier.
- At tax time you reconcile actual MAGI vs estimated using Form 8962. Overpaid → refund. Underpaid → repayment (capped below 400% FPL; uncapped above).
The 400% FPL subsidy cliff
The original ACA capped APTC at 400% FPL — earn $1 above and lose all subsidy. The American Rescue Plan (2021) and Inflation Reduction Act (2022) eliminated the cliff through 2025. Those enhancements were not extended.
Households at 401% FPL or more pay full premium. The strategies in the next section directly affect whether a household lands above or below 400%.
Practical ways to lower MAGI
MAGI for ACA purposes = AGI + tax-exempt interest + non-taxable Social Security + excluded foreign income. Use above-the-line deductions and pre-tax contributions to bring AGI down.
| Strategy | 2027 limit (typical) | Notes |
|---|---|---|
| Traditional IRA contribution | $7,000 / $8,000 (50+)i | Deductible if not covered by workplace plan; phase-outs apply. |
| HSA contribution | $4,500 self / $9,000 family (2027)i | Above-the-line deduction. Must have HDHP coverage. |
| SEP-IRA / Solo 401(k) | Up to ~25% of net SE earningsi | Big lever for self-employed brokers and 1099 households. |
| Pre-tax HSA / FSA via W-2 | Per plani | Already excluded from Box 1 wages — confirm before double-counting. |
| Student loan interest | $2,500i | Above-the-line; phase-outs by MAGI. |
| Educator expenses | $300i | K-12 teachers only. |
| Health insurance premium (self-employed) | Up to net SE incomei | Adjustment to income; interacts with APTC reconciliation. |
| Bunching capital losses | $3,000/yr against ordinary incomei | Tax-loss harvesting in taxable brokerage. |
Sources
- HHS Poverty Guidelines — Federal Poverty Level (FPL)(opens in a new tab)
- 45 CFR 155.305 — Cost-sharing reductions and actuarial value standards(opens in a new tab)
- IRS Form 8962 — Premium Tax Credit reconciliation(opens in a new tab)
- CMS Marketplace Integrity & Affordability Final Rule (Apr 2025)(opens in a new tab)
- 26 CFR 1.36B — Premium tax credit regulations(opens in a new tab)
The information contained on this website is for educational purposes only. We are not responsible for missing or inaccurate information. Please consult a licensed insurance broker in your state and area for insurance advice. Please consult a CPA for tax or legal advice.