Health insurance subsidies are a form of financial assistance offered through the Affordable Care Act (ACA). The subsidies are designed to help you manage the cost of your health insurance premiums. The amount of aid you’re eligible for depends on household size and household income, helping to ensure that individuals with lower earnings receive the substantial financial support they need.
As we look ahead to 2024, it’s important to note the following key figures:
- Individuals purchasing the benchmark Marketplace insurance plan (typically the second-lowest-cost silver plan) do not have to pay more than 8.39% of their household income for their monthly premiums.
- Individuals with household income at or below 150% of the federal poverty level (FPL) pay $0 for the benchmark plan.
- Maximum out-of-pocket (OOP) costs (copayment, coinsurance, deductibles) for Marketplace coverage is $9,450 for self-only plans and $18,900 for family plans. Cost-sharing reductions may significantly lower OOP costs.
Throughout this guide, we explore the 2024 income limits, eligibility criteria, and more, providing you with the information needed to make critical decisions regarding your health insurance coverage.
Table of Contents
ACA Income Limits for 2024
Eligibility for 2024 ACA subsidies is determined by comparing your expected 2024 income to the federal poverty levels set in 2023. Subsidies are scaled based on where your income level falls within the designated poverty levels, as shown in the table below.
Household Size | 2024 Income | 2024 Income for Alaskan Residents | 2024 Income for Hawaiian Residents |
|---|---|---|---|
Individuals | $14,580 | $18,210 | $16,770 |
Family of 2 | $19,720 | $24,640 | $22,680 |
Family of 3 | $24,860 | $31,070 | $28,590 |
Family of 4 | $30,000 | $37,500 | $34,500 |
Family of 5 | $35,140 | $43,930 | $40,410 |
Family of 6 | $40,280 | $50,360 | $46,320 |
Family of 7 | $45,420 | $56,790 | $52,230 |
Family of 8 | $50,560 | $63,220 | $58,140 |
Family of more than 8 | Add $5,140 per additional person | Add $6,430 per additional person | Add $5,910 per additional person |
Premium Tax Credits
Premium tax credits are discounts applied directly to health insurance premiums for plans purchased through the Health Insurance Marketplace. The amount of the credit depends on several factors, including your household income, the size of your family, and the cost of Marketplace plans in your area.
ACA healthcare plans are divided into metal tiers: bronze, silver, gold, and platinum. Bronze plans have low monthly premiums and high out-of-pocket costs, while platinum plans have higher premiums and lower out-of-pocket costs. The other two plans fall in between.
The amount of subsidy an individual changes based on their expected household income for the upcoming year. Suppose you’re expected to make between 100% and 150% of the poverty level in 2024. In that case, the expected contribution for the benchmark plan (the second-lowest-cost silver plan available in the Marketplace in your area) is $0. In this case, you can access the benchmark plan without having to pay a monthly premium.
Households earning over 400% of the FPL are expected to pay 8.5% of their income to cover health insurance premiums. The subsidy is based on a sliding scale for incomes that fall between 151% and 400% of the poverty level. If the Marketplace health insurance exceeds your expected contribution limit, subsidies are generally available to offset the difference.
While premium tax credits are based on the cost of the benchmark plan, the credits can be applied to any of the different levels of coverage. The following table shows the expected contribution limits for 2024.
Household Income | Expected Contribution |
|---|---|
Up to 150% of FPL | 0% of your income (no premium for benchmark plan) |
151% to 200% of FPL | 0% to 2% of your income |
201% to 250% of FPL | 2% to 4% of your income |
251% to 300% of FPL | 4% to 6% of your income |
301% to 350% of FPL | 6% to 8.5% of your income |
400% of FPL or higher | 8.5% of your income |
Eligibility Criteria
To be eligible for premium tax credits, you must meet the following criteria:
- Your household income falls within the Obamacare income limits for 2024.
- No household member has access to affordable coverage that provides minimum value through an employer.
- You are not eligible for Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).
- You are a U.S. citizen or have proof of legal residency.
- If you are married, you file your taxes jointly with your spouse.
The following table indicates the ACA income limits for 2024:
Household Size | 100% FPL | 138% FPL | 150% FPL | 200% FPL | 250% FPL | 300% FPL | 400% FPL |
|---|---|---|---|---|---|---|---|
Individuals | $14,580 | $20,120 | $21,870 | $29,160 | $36,450 | $43,740 | $58,320 |
Family of 2 | $19,720 | $27,214 | $29,580 | $39,440 | $49,300 | $59,160 | $78,880 |
Family of 3 | $24,860 | $34,307 | $37,290 | $49,720 | $62,150 | $74,580 | $99,440 |
Family of 4 | $30,000 | $41,400 | $45,000 | $60,000 | $75,000 | $90,000 | $120,000 |
Family of 5 | $35,140 | $48,493 | $52,710 | $70,280 | $87,850 | $105,420 | $140,560 |
Family of 6 | $40,280 | $55,586 | $60,420 | $80,560 | $100,700 | $120,840 | $161,120 |
Family of 7 | $45,420 | $62,680 | $68,130 | $90,840 | $113,550 | $136,260 | $181,680 |
Family of 8 | $50,560 | $69,773 | $75,840 | $101,120 | $126,400 | $151,680 | $202,240 |
Eligibility for Those With Employer-Sponsored Plans
If your employer offers affordable health insurance you may not be eligible for a 2024 subsidy, even if you fall within the ACA income limits for 2024. To be considered affordable, in 2024, the monthly premiums must be no more than 8.39% of household income. If self-only coverage is less than 8.39%, but family coverage costs more, dependents can purchase subsidized coverage on the exchange while the employee remains on their employer coverage.
To meet the minimum value requirement, employer-offered plans must provide substantial coverage for both inpatient hospital care and physician services. In addition, the plan must pay a minimum of 60% of the combined cost, which is similar to a bronze Marketplace plan. In addition, in 2024, the plan must have an annual out-of-pocket maximum of $9,450 for an individual or $18,900 for a family.
If an employer offers a health insurance plan that does not meet the requirements. In that case, an employee can qualify for premium tax credits as long as they meet the other eligibility requirements.
Eligibility for Those With Medicaid
Medicaid eligibility varies by state. Generally, those who are eligible for Medicaid are not eligible for Marketplace subsidies, as Medicaid typically offers financial assistance greater than the amount of the subsidy.
Many states have expanded Medicaid coverage, offering it to those with incomes of up to 138% of the federal poverty level ($20,120 for an individual in 2024). In states without expanding Medicaid eligibility, households with incomes as low as 100% of the federal poverty level can qualify for Marketplace subsidies. However, those with income below this level are not eligible for subsidies and are generally also not eligible for Medicare. This creates a coverage gap that currently impacts approximately 1.9 million Americans.
Eligibility for CHIP varies by state. However, it tends to be more lenient than Medicaid eligibility, meaning households with higher incomes may still receive CHIP coverage. When children are eligible for CHIP, they are not eligible for subsidies. However, adults in the household may still be eligible for subsidies.
Cost-Sharing Reductions
Cost-sharing reductions are another form of financial assistance that may be available for individuals purchasing health insurance on the Marketplace. Cost-sharing reductions help keep healthcare affordable by lowering out-of-pocket expenses such as copayments, coinsurance, and deductibles on silver-level plans, bringing them more in line with the OOP costs for a gold or platinum plan.
The amount of the cost reduction depends on household income and is adjusted on a sliding scale. Depending on where a household falls on the FPL scale, an individual may be eligible for a CSR 94 Silver Plan, a CSR 87 Silver Plan, or a CSR 73 Silver Plan. These numbers refer to the plan’s actuarial value, which refers to the average percentage of costs the plan shares. Each plan also has different OOP limits.
Eligibility Criteria
To be eligible for cost-sharing reductions, you must meet the following criteria:
- Your household income falls between 100% and 250% of the federal poverty level.
- You’re enrolled in a silver-level Marketplace plan.
Individuals with household incomes that fall within the required range can continue applying the premium tax credit (subsidies) to any level plan. However, cost-sharing reductions only apply if you choose a silver-level plan.
Under the ACA, plans also have OOP spending limits that apply regardless of household income. In 2024, Marketplace plans cap annual OOP spending at $9,450 for self-only plans and $18,900 for family plans. The following table illustrates how cost-sharing reductions impact OOP spending limits at various income levels.
Household Income | Plan Type Available | 2024 Max Annual OOP: Self-Only Plans | 2024 Max Annual OOP: Family Plans |
|---|---|---|---|
All income levels | All Plans | $9,450.00 | $18,900.00 |
100% to 150% of FPL | CSR 94 | $3,150.00 | $6,300.00 |
151% to 200% of FPL | CSR 87 | $3,150.00 | $6,300.00 |
How to Calculate Your Modified Adjusted Gross Income (MAGI)
Eligibility for premium tax credits and cost-sharing reductions is based on your household’s modified adjusted gross income (MAGI) rather than the income stated on your tax return. When applying for Marketplace health insurance, you must estimate your household’s MAGI for the upcoming year.
MAGI starts with your adjusted gross income (AGI), which is your gross income adjusted for things like student loan interest, educator expenses, alimony payments, and retirement plan contributions. MAGI adds some of these deductions back in, potentially creating a larger baseline income amount.
Included in MAGI
When calculating MAGI, the following items are included in household income:
- Federal taxable wages (income from your job)
- Tip income
- Self-employment income (business income minus business expenses)
- Unemployment compensation
- Taxable and non-taxable Social Security income (before deductions)
- Social Security Disability Income (SSDI)
- Retirement or pension income, including IRA and 401(k) withdrawals
- Capital gains income
- Investment income, including tax-exempt interest
- Net rental and royalty income
- Alimony income for divorces finalized before Jan. 1, 2019
- Untaxed foreign income
Generally, household income is calculated based on the MAGI of all household members, including the tax filer, their spouse, and each tax dependent that is required to file a tax return, even if the dependents do not need health insurance coverage.
Excluded From MAGI
Certain items are excluded from your MAGI, including:
- Supplemental Security Income (SSI)
- Qualified distributions from a designated Roth account
- Alimony payments for divorces settled after Jan. 1, 2019
- Child support received
- Gifts received
- Veterans’ disability payments
- Worker’s compensation payments
- Proceeds from loans (ex. bank loans, home equity loans, student loans)
- Child Tax Credit checks or other deposits received from the IRS
How to Calculate Your Potential Subsidy Savings
You can calculate your potential premium tax credit for 2024 by following these four steps:
- Determine your projected 2024 household income and compare it to the 2023 federal poverty levels to see where your income falls within the subsidy eligibility range.
- Check the expected contribution percentage for your income level, which dictates how much of your income you’re expected to contribute toward your health insurance premiums.
- Identify the cost of the second-lowest-cost silver plan in your area, as this is the benchmark for calculating subsidies.
- Subtract your expected contribution (determined in step 2) from the total cost of the benchmark plan. The result is your estimated subsidy amount.
Putting It All Together
When purchasing health insurance from the Marketplace, it’s important to understand the financial assistance available and the eligibility requirements. Premium tax credits and cost-sharing reductions can both make health insurance more affordable and accessible for individuals and families.
Keep in mind that eligibility for financial assistance is based, in part, on the modified adjusted gross income (MAGI) for all household members, including dependents who are required to file a tax return, even if they do not need health insurance coverage.
You can easily calculate your potential subsidy savings by following the four steps listed above. However, if you need additional help, you can seek assistance from a qualified health insurance specialist.