Subsidy Eligibility

Premium Tax Credit and the American Rescue Plan

Premium Tax Credit: A tax credit you can use to lower your monthly insurance payment (called your “premium”) when you enroll in a plan through the Health Insurance Marketplace. Your tax credit is based on the income estimate and household information you put on your Marketplace application. You can buy health insurance through other sources, but the only way to get a premium tax credit is through the Health Insurance Marketplace.

Under the current law, if your income is between 139% and 400% of the Federal Poverty Level (FPL) you may get tax credits—also known as subsidies—to help pay for health insurance coverage.

Under the American Rescue Plan (Section 9661), individuals and families may be eligible for a temporary increase in premium tax credits so that no one pays more than 8.5% of their household income towards the cost of the benchmark plan1 or a less expensive plan, thereby lowering their out-of-pocket premium costs. Marketplace enrollees who are currently ineligible for subsidies because their income is greater than 400 percent of the FPL could gain eligibility for subsidies under the enhanced subsidy structure.

Income Range (% of FPL) Under Current Law (Range of Max Income Contribution %) American Rescue Plan (Range of Max Income Contribution %)
100-133% 2.07 0
133-150% 3.10-4.14 0
150-200% 4.14-6.52 0-2.0
200-250% 6.52-8.33 2.0-4.0
250-300% 8.33-9.83 4.0-6.0
300-400% 9.83 6.0-8.5
400%+ -- 8.5

Tax Credits Under Current Law and the 2021 American Rescue Plan (Section 9661)*

Current Law | $19,300 Income for Single Individual (150% FPL)

Benchmark1 Premium Premium Tax Credit Net Premium Paid
21 Years Old $4,300 $3,500 $800
45 Years Old $6,200 $5,400 $800
64 Years Old $12,900 $12,100 $800

Under Section 9661 | $19,300 Income for Single Individual (150% FPL)

Benchmark1 Premium Premium Tax Credit Net Premium Paid
21 Years Old $4,300 $4,300 $0
45 Years Old $6,200 $6,200 $0
64 Years Old $12,900 $12,900 $0

Current Law | $58,000 Income for Single Individual (450% FPL)

Benchmark1 Premium Premium Tax Credit Net Premium Paid
21 Years Old $4,300 $0 $4,300
45 Years Old $6,200 $0 $6,200
64 Years Old $12,900 $0 $12,900

Under Section 9661 | $58,000 Income for Single Individual (450% FPL)

Benchmark1 Premium Premium Tax Credit Net Premium Paid
21 Years Old $4,300 $0 $4,300
45 Years Old $6,200 $1,250 $4,950
64 Years Old $12,900 $7,950 $4,950

*Source: https://www.cbo.gov/system/files/2021-02/hwaysandmeansreconciliation.pdf

1Note: This chart and potential savings shown are based on the benchmark plan, which is the second-lowest-cost Silver-level plan offered in your service area. Your actual premium may be higher if you enroll in a higher-cost Silver-, Gold-, or Platinum-level plan.


Helpful Resources


Understanding Your 2021 OptimaFit® Individual & Family Health Plan Options

Individual health plans offer a variety of price options and are categorized by metallic tiers: Gold, Silver, and Bronze.

Categorizing plans by metallic tier makes it easier for you to compare plans based on their cost and coverage options. If you do not qualify for a subsidy, you may want to consider plans not offered on HealthCare.gov, also known as "Off-Exchange" plans.

This chart provides an overview of health plan tiers to help you determine which metallic plan would be best for you.

Gold Silver Bronze
Monthly Premium $$$ $$ $
Percent of Healthcare Cost Covered 80% 70% 60%
Good If... You want to save on premium costs, while still reducing your out-of-pocket costs. You need to balance monthly premium costs with out-of-pocket costs.* You don't plan to use a lot of healthcare services.

Things to Consider

If you don't anticipate you will need a lot of healthcare services, you may want to consider a bronze or silver plan for a lower monthly premium.

However, if you or a family member have a serious injury or illness, a bronze or silver plan will require higher out–of–pocket costs for treatment. With a silver or bronze plan, you pay less on a monthly basis but may pay more for treatment. With a gold plan, you pay more on a monthly basis but much less for treatment.


Need Help? Talk To an OptimaFit Plan Advisor 1-844-206-3208.

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