The enhanced premium tax credits that made marketplace health insurance affordable for millions of Americans expired December 31, 2025. The One Big Beautiful Bill Act did not extend them. Starting in 2026, the original ACA rules are fully back in effect, and many enrollees are facing sticker shock.
What Changed with ACA Subsidies After 2025?
The American Rescue Plan Act of 2021 expanded premium tax credits in two key ways: it eliminated the 400% FPL eligibility cliff and reduced the percentage of income enrollees were required to pay toward the benchmark plan premium. The Inflation Reduction Act of 2022 extended those enhanced credits through 2025. OBBBA, signed July 4, 2025, did not extend them further.
As of January 1, 2026, the original ACA rules are back. The 2026 contribution percentages under Rev. Proc. 2025-25 are:
| Household Income (% FPL) | Required Contribution (% of Income) |
|---|---|
| Under 133% | 2.10% |
| 133% to 150% | 3.14% to 4.19% |
| 150% to 200% | 4.19% to 6.60% |
| 200% to 250% | 6.60% to 8.44% |
| 250% to 300% | 8.44% to 9.96% |
| 300% to 400% | 9.96% |
| Above 400% FPL | No credit available |
How Is the 2026 Premium Tax Credit Calculated?
The credit equals the annual cost of the benchmark plan (second-lowest-cost silver plan, or SLCSP, in your area) minus your required contribution. If your required contribution equals or exceeds the benchmark plan premium, the credit is zero.
For example: a single 55-year-old with $55,000 income (346% FPL) pays 9.96% of income toward the benchmark plan, or $5,478 per year ($456/month). If their benchmark plan costs $900/month, the credit covers the remaining $444/month.
Who Is Most Affected by the 400% FPL Cliff?
Early retirees (ages 55 to 64) are the hardest hit. They face the highest benchmark premiums due to age-rating rules, but many have retirement income just above 400% FPL, leaving them with zero subsidy and premiums that can reach $1,500 to $2,500 per month.
Self-employed individuals with moderate income who qualified for partial credits under the enhanced rules now lose all subsidy if their income tops 400% FPL, roughly $63,840 for a single person in 2026.
Households that adjusted income estimates based on enhanced subsidy rules may have received advance premium tax credits that were too high. If 2026 actual income exceeded 400% FPL, all advance credits must be repaid with no cap.
What Is the Form 8962 Repayment Risk?
If you received advance premium tax credits (APTC) throughout 2026 and your actual income came in higher than projected, you must reconcile on Form 8962 with your 2026 federal return. Under the original ACA rules now in effect, there is no repayment cap for households above 400% FPL: the full excess APTC must be repaid. Under the enhanced rules (2021 to 2025), repayment was capped; that protection is gone.
Anyone who expects their 2026 income to be higher than the estimate on file with their marketplace should update their income estimate at Healthcare.gov or their state exchange immediately to reduce overpaid APTC.
What Can Marketplace Enrollees Do Now?
- Update your income estimate if your 2026 earnings have changed from what you reported during enrollment.
- Compare your SLCSP to actual cost. Use the benchmark plan premium as the subsidy calculation base, not your actual enrolled plan.
- Consider HSA-qualified plans. If you are buying an off-marketplace HDHP, HSA contributions of up to $4,400 (self-only) or $8,750 (family) in 2026 can reduce taxable income and offset premium costs.
- Run a year-end APTC check. Estimate your full-year income before December 31 and adjust APTC to avoid a large balance due.
Have questions about your 2026 premium tax credit or Form 8962 reconciliation? Contact TS CPA for a free consultation. We respond within the same day.