Most people put themselves into one of two buckets: “I definitely qualify for a subsidy” or “I definitely don’t, so there’s no point checking.” Both assumptions are riskier than usual heading into 2027, because the rules underneath them changed at the end of 2025.
Here is what actually determines your eligibility now, and how to estimate what it’s worth before you shop for a plan.
What changed for 2026 and 2027
The enhanced premium tax credits that expanded ACA subsidies from 2021 through 2025 expired on 31 December 2025. Congress did not extend them before the deadline. That reverts subsidy eligibility to the ACA’s original structure for 2026 and, unless something changes before Open Enrollment opens, for 2027 as well:
- The subsidy cliff at 400% of the federal poverty level (FPL) is back. Under the enhanced rules, no one lost eligibility entirely based on income. Under the reverted rules, earning even slightly above 400% FPL can mean $0 in premium tax credits, regardless of how expensive the benchmark plan is in your area.
- The expected contribution percentages reset to pre-2021 levels, which are higher at every income band than what enrollees have been used to.
A bipartisan bill to extend the enhanced credits passed the House in January 2026 but has not passed the Senate. A separate Senate proposal has been discussed but not finalised. This is genuinely unresolved, so treat everything below as the rules currently in effect, and confirm your numbers again closer to Open Enrollment in case Congress acts before then.
The 100%–400% FPL rule, in real numbers
Subsidy eligibility is based on your household income as a percentage of the federal poverty level, which depends on household size. Using the most recently published guidelines:
| Household size | 100% FPL | ~250% FPL | 400% FPL (cliff) |
|---|---|---|---|
| 1 | $15,960 | ~$39,900 | $63,840 |
| 2 | $21,640 | ~$54,100 | $86,560 |
| 3 | $27,320 | ~$68,300 | $109,280 |
| 4 | $33,000 | ~$82,500 | $132,000 |
Two things to flag about this table. First, the premium tax credit calculation for a given plan year typically runs on the prior year’s published guidelines, not the current year’s, so treat these as a close working estimate rather than the exact figure the marketplace will use. Second, below roughly 250% FPL you may also qualify for cost-sharing reductions, which lower your deductible and out-of-pocket costs on a Silver plan specifically. We cover how those interact with plan selection in our guide to choosing an ACA marketplace plan.
What if your income sits right around 400%?
This is where the cliff actually bites. Because there is no longer a gradual phase-out, a household at 395% FPL and a household at 405% FPL can have identical circumstances but a five-figure difference in what they pay for the exact same plan.
If your income is anywhere near that line, it is worth reviewing with an advisor before you finalise your estimate. Legitimate ways to manage where you land include timing retirement account contributions, understanding what counts toward Modified Adjusted Gross Income, and knowing that self-employed enrollees can typically deduct their own premiums, which itself changes the income figure used for eligibility.
How much could you actually save
To illustrate the mechanism rather than promise a number: a household of three at roughly 250% FPL might be asked to contribute somewhere in the region of 4–6% of income toward the benchmark Silver plan, with the tax credit covering the rest of that benchmark’s premium. The same household at 390% FPL is asked to contribute close to the full 9.96% ceiling, meaning a much smaller credit. The same household at 405% FPL is asked to contribute 100%, meaning no credit at all.
Your actual number depends on your county, the benchmark plan available there, your exact household size and income, and ages of everyone covered. There is no substitute for running your specific numbers, which is the first thing we do with anyone who reaches out ahead of Open Enrollment.
Special situations that change the math
- You have a job offer with health coverage. An employer offer does not automatically disqualify you, but it can, depending on whether that coverage is considered “affordable” under IRS rules. We walk through that test in Marketplace vs. employer coverage.
- You’re self-employed. The self-employed health insurance deduction and marketplace subsidies both key off the same income figure, and getting the sequencing right can meaningfully change your result.
- You’re retired but not yet 65. Marketplace subsidies are often the main bridge to Medicare eligibility, and the income rules apply the same way regardless of employment status.
Common questions
Do I need to re-apply every year?
Yes, in the sense that your income estimate needs to be reconfirmed or updated each year during Open Enrollment. Auto-renewal will keep you covered, but it will not catch an income change or a benchmark plan change on its own.
What if my income changes during the year?
Report it. Credits are reconciled against your actual income at tax time, so an outdated estimate in either direction can mean an unexpected bill or a missed credit.
Is this the same as cost-sharing reductions?
No. Premium tax credits lower your monthly premium. Cost-sharing reductions lower your deductible and out-of-pocket costs, apply only on Silver plans, and use a different (lower) income cutoff. Many households qualify for both.
Getting your actual number
The subsidy structure for 2027 is more restrictive than what enrollees saw from 2021 through 2025, and the cliff makes precision matter more than it used to. Get in touch before Open Enrollment opens and we’ll run your household’s actual eligibility, not a rule-of-thumb estimate — including how it interacts with any employer offer and whether you’d qualify for a Special Enrollment Period to act sooner. You can also browse marketplace plan options directly.
This article is general information, not personalised advice. Eligibility, subsidy amounts and applicable rules depend on your income, household, location and current law, which was still subject to potential Congressional action for 2027 as of publication.
