How ACA health insurance subsidies work
By Colson · Updated June 13, 2026
An ACA premium tax credit equals the benchmark Silver plan's premium minus the share of income you're expected to pay (about 2%–9.96% in 2026, based on your income relative to the federal poverty level). For 2026, the enhanced subsidies have expired, so a 400%-of-poverty income cliff applies.
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Estimate your ACA subsidy →What is the benchmark plan?
Your subsidy is calculated from the second-lowest-cost Silver plan in your area — the 'benchmark.' The credit is the difference between that benchmark premium and your expected contribution, and you can apply it to any marketplace plan, not just Silver.
How is your expected contribution set?
The marketplace looks at your household income as a percentage of the federal poverty level, then assigns an 'applicable percentage' of income you're expected to put toward the benchmark. In 2026 that ranges from about 2% at lower incomes up to 9.96% near the top of the eligibility range.
What changed for 2026?
The enhanced subsidies from the American Rescue Plan and Inflation Reduction Act expired at the end of 2025. For 2026, the schedule reverted to the original ACA formula, which restores the '400% cliff' — households above 400% of the federal poverty level generally get no premium tax credit. (Congress was debating an extension as of early 2026; check the current rules at enrollment.)
Who qualifies?
Generally, you must buy a marketplace plan, have household income at or above 100% of the poverty level (Medicaid usually covers lower incomes in expansion states), not have access to affordable employer coverage, and — for 2026 — fall under the 400% cliff. Exact eligibility depends on your state and household.
Frequently asked questions
What is the income limit for ACA subsidies in 2026?
For 2026, premium tax credits generally phase out at 400% of the federal poverty level — about $60,240 for a single person and roughly $124,800 for a family of four — because the enhanced subsidies expired and the cliff returned. Verify current limits at enrollment.
How do I estimate my ACA subsidy?
Estimate your income as a percentage of the poverty level for your household size, apply the 2026 contribution percentage, and subtract it from your area's benchmark Silver premium. Our calculator does this with a national-average benchmark.
Do ACA subsidies depend on where I live?
Yes. Benchmark premiums are set county-by-county and vary widely by state, and Alaska and Hawaii use higher poverty guidelines, so two identical households can get very different subsidies.
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