ACA Subsidy Guide
An ACA marketplace subsidy can reduce your coverage costs by lowering your monthly premium, your out-of-pocket costs, or both, depending on your household income and eligibility.
The guide explains how the subsidies work, who is eligible, and how they impact your total out-of-pocket cost.
It also explains the difference between premium tax credits, which reduce your monthly premium, and cost-sharing reductions, which reduce your out-of-pocket costs, so you can compare the plans and understand what financial assistance you're entitled to.
Income Used by the Marketplace
Should Include
- Federal taxable wages, salaries, and tips
- Net self-employment income
- Unemployment compensation
- Taxable and non-taxable Social Security income, including SSDI
- Capital gains and investment income, including tax-exempt interest
- Net rental and royalty income
- Excluded (untaxed) foreign income
- Most retirement, pension, IRA, and 401(k) income
- Alimony from divorces or separations finalized before January 1, 2019
- Other taxable income included in adjusted gross income
Income the Marketplace Does Not Count
Should Not Include
- Workers' compensation
- Supplemental Security Income (SSI)
- Child support
- Gifts
- Veterans' disability payments
- Loan proceeds
- Child Tax Credit payments or deposits
- Alimony from divorces or separations finalized on or after January 1, 2019
Why This Matters
Marketplace savings are based on your expected 2027 household modified adjusted gross income, not last year's income.
For most people, Marketplace MAGI is adjusted gross income plus untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.
Update your application if your income or household changes.
Advance premium tax credits are reconciled on your federal tax return, so using too much in advance may mean owing money at tax time.
2027 Premium Tax Credit Income Range
For 2027, premium tax credit eligibility generally requires household income between 100% and 400% of the federal poverty line, along with other Marketplace eligibility rules.
Income above 400% FPL is not eligible for the federal premium tax credit. Limited exceptions can apply to certain households below 100% FPL.
For 2027 coverage, the Marketplace uses the 2026 HHS poverty guidelines because they are the most recently published guidelines on the first day of the 2027 Open Enrollment Period.
The amounts below apply to the 48 contiguous states and the District of Columbia; Alaska and Hawaii use higher guidelines.
| Household Size | 100% FPL | 400% FPL |
|---|---|---|
| 1 | $15,960 | $63,840 |
| 2 | $21,640 | $86,560 |
| 3 | $27,320 | $109,280 |
| 4 | $33,000 | $132,000 |
| 5 | $38,680 | $154,720 |
| 6 | $44,360 | $177,440 |
| 7 | $50,040 | $200,160 |
| 8 | $55,720 | $222,880 |
For each additional household member, add $5,680 at 100% FPL or $22,720 at 400% FPL.
2027 Benchmark Premium Contribution
The IRS-applicable percentage determines the household's expected contribution toward the second-lowest-cost Silver benchmark plan.
The premium tax credit generally covers the difference between that contribution and the benchmark premium, subject to eligibility and the cost of the plan selected.
| Household Income (FPL) | Applicable Percentage of Household Income |
|---|---|
| Less than 133% | 2.15% |
| 133% to less than 150% | 3.23% - 4.30% |
| 150% to less than 200% | 4.30% - 6.78% |
| 200% to less than 250% | 6.78% - 8.66% |
| 250% to less than 300% | 8.66% - 10.22% |
| 300% through 400% | 10.22% |
2027 Cost-Sharing Reduction Limits
Cost-sharing reductions can lower deductibles, copayments, coinsurance, and out-of-pocket limits when an eligible person enrolls in a Marketplace Silver plan.
Deductibles and service-level costs vary by plan; the figures below are the federal 2027 maximum annual out-of-pocket limits, not required deductibles or copayments.
| Silver Plan Variation | Household Income | Actuarial Value | Individual Limit | Family Limit |
|---|---|---|---|---|
| Standard Silver | Above 250% FPL | 70% | $12,000 | $24,000 |
| CSR 73 | Above 200% through 250% FPL | 73% | $9,600 | $19,200 |
| CSR 87 | Above 150% through 200% FPL | 87% | $4,000 | $8,000 |
| CSR 94 | 100% through 150% FPL | 94% | $4,000 | $8,000 |
These limits apply to in-network essential health benefits. A plan may have a lower out-of-pocket maximum.