Changes Regarding Tax Subsidies
Prior to 2026, there were two types of tax subsidies in effect: the Advance Premium Tax Credit (APTC) and the Enhanced Premium Tax Credit (ePTC). Those with a MAGI between 100% and 400% of the Federal Poverty Level (FPL) received the APTC and will continue to receive this for 2027. (Keep in mind that the amount changes each year; see your renewal letter from Connect for Health for specific tax credit and premium amounts.) The ePTC was offered to those whose MAGI was above the 400% FPL mark but still within a qualifying range. Those tax credits expired at the end of 2025. This means that certain households who received a tax credit in 2025 did not receive a tax credit in 2026, and will not receive a tax credit in 2027.
Subsidy Cliff
The “Subsidy Cliff” returned in 2026. If your MAGI is under 400% of the Federal Poverty Level (FPL), you will receive a subsidy. Subsidies will be incrementally adjusted up to 400% FPL. However, for 2026 and 2027 enrollments, there will be a subsidy cliff at 400% FPL. This means that if your MAGI increases above that threshold by the end of the year, even by $1, you will be required to pay back the entire subsidy you received in 2026.
Here’s a breakdown by household size for plan year 2027.
| Household Size | 400% FPL |
|---|---|
| 1 | $63,841 |
| 2 | $86,561 |
| 3 | $109,281 |
| 4 | $132,001 |
| 5 | $154,721 |
| 6 | $177,441 |
* These amounts are not guaranteed. Please consult your tax advisor to verify your subsidy cliff amount.
For example, a household with four members would need their MAGI to remain under $132,001. If it increased above that threshold, they would be required to pay back the entire subsidy they received throughout 2027. Make sure you are working with a tax professional to determine an accurate MAGI for 2027 and account for any potential extra income. Will you be receiving a bonus? Investment income? Severance package? Other?
MAGI for 2027
We will need an accurate MAGI to list on your application for 2027. We need this whether or not you are making changes to your plan. Please work with your tax professional during this time to determine your MAGI for 2027; we are unable to advise on this in any way. Also, keep in mind that Connect for Health is frequently requiring income verifications. Many individuals lost their 2026 coverage or their tax subsidy because they did not provide income verification documents to Connect for Health within the required timeframe. Please be prepared to provide this documentation if requested.
