The subsidy is a federal premium tax credit that lowers your monthly premium. About three in four CoverME.gov enrollees got one in 2026. Here is how it is worked out.
The enhanced credits of 2021 to 2025 are gone, so above 400% there is no credit at all this year.
The credit is set so you pay a fixed share of your income for the second-cheapest Silver plan in your area (the benchmark). For 2027 that share runs from about 2.15% of income at the low end to 10.22% at 300% to 400% of the poverty level. Example: a single adult earning about $40,000 (around 250% of the poverty level) is expected to pay about 8.66%, roughly $289 a month, for the benchmark plan. The credit covers the rest. Pick a cheaper plan and you pay less; pick a richer one and you pay the difference.
With income up to 250% of the poverty level, Silver plans also come with cost-sharing reductions: lower deductibles, copays and out-of-pocket limits. You only get them if you choose Silver. See Bronze, Silver or Gold.
Most people take the credit in advance so it lowers the bill each month. It is based on your estimate of 2027 income, and your tax return squares it up. Since 2026 there is no cap on paying back extra credit, so a careful estimate matters. Read estimating your income and your 1095-A at tax time.
Modified adjusted gross income for everyone in the tax household: wages, self-employment profit, unemployment, taxable Social Security and more. Contributions to an HSA or a traditional IRA lower it, which can raise your credit.
400% of the federal poverty level, about $63,840 for one person or $132,000 for a family of four for 2027 coverage. Above that there is no premium tax credit this year.
For 2027 you are expected to pay between about 2.15% and 10.22% of household income for the benchmark Silver plan, depending on income. The credit pays the rest.
Only if the job's plan is unaffordable (over 10.22% of household income for 2027 for the employee's cheapest plan) or does not meet minimum value.
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