A subsidy is government help that lowers how much you pay for Marketplace health coverage each month. The two main types of assistance offered through the Affordable Care Act are advance premium tax credits (which lower your monthly premium) and cost-sharing reductions (which lower out-of-pocket costs like deductibles and copays).
Premium tax credits (PTC / APTC)
Premium tax credits reduce your monthly premium. You can get them in advance (called APTC) to lower your monthly bill, and the Marketplace will estimate your credit when you apply. If you take advance payments, you must file Form 8962 with your tax return to reconcile the advance payments with the credit you actually qualify for based on your final income. If you do not reconcile tax credits, you will not be eligible for a subsidy in future years until you reconcile.
Cost-sharing reductions (CSRs)
CSRs lower your deductibles, copays, and coinsurance, and are available only if your income qualifies and you enroll in a Silver plan. CSRs make care cheaper when you use it, not your monthly premium.
Who usually qualifies
Subsidies depend on your household size and expected modified adjusted gross income (MAGI). Employer coverage, immigration status, and other rules can affect eligibility, such as whether an employer offer is affordable or provides minimum value. The Marketplace uses the information you enter to determine eligibility.
Beginning in plan year 2026, only lawfully present immigrants with income above 100 percent of the federal poverty level (FPL) will be eligible for premium tax credits (PTCs). Lawfully present immigrants (LPRs) with income below 100 percent FPL who are ineligible for Medicaid because of their immigration status will no longer be eligible for PTCs. This includes lawfully permanent residents who are in the five-year waiting period for Medicaid.
Beginning in plan year 2027, only U.S. citizens, LPRs, Cuban and Haitian entrants, and COFA migrants will be eligible for PTCs. Lawfully present immigrants with any other immigration status, including people with work-related visas and people granted asylum, will not be eligible for PTCs, although they remain eligible to enroll in marketplace coverage without PTCs.
How to get and keep your subsidy
Estimate your household income for the coverage year and apply through HealthSherpa.
Update your application if income or household size changes during the year - this keeps your APTC accurate and reduces tax surprises.
If you take advance payments, keep records and file Form 8962 when you file taxes to reconcile the credit.
If you have questions or need assistance, please contact our Consumer Advocates at 855-772-2663