The short answer
Three things changed. The enhanced premium tax credits expired after 2025, so subsidies again stop at 400% of the federal poverty line, which for 2027 coverage is $63,840 for a single person and $132,000 for a family of four.1,6,7 Below that line, the most a household is expected to pay toward the benchmark silver plan in 2027 is 10.22% of income.5 And starting with tax year 2026, excess advance credit must be repaid in full when you file; the old repayment caps are gone.2,3
For the self-employed, that turns the income estimate you give the Marketplace into a tax decision. Update it when income changes, use deductions that lower modified AGI, and compute the self-employed health insurance deduction together with the credit. On HealthCare.gov, enroll by December 15, 2026 for coverage starting January 1; open enrollment ends January 15, 2027.8
| Item | Figure |
|---|---|
| Subsidy income limit (400% of the poverty line), household of 1 | $63,8406,7 |
| Household of 2 / household of 4 (48 contiguous states and D.C.) | $86,560 / $132,0006 |
| Expected contribution at 300% to 400% of the poverty line | 10.22% of household income5 |
| Cap on repaying excess advance credit | None, beginning with tax year 20262,3 |
| HealthCare.gov open enrollment | Nov. 1, 2026 to Jan. 15, 2027; Dec. 15 for a Jan. 1 start8 |
| 2027 HSA contribution limit | $4,500 self-only / $9,000 family12 |
| Average benchmark silver premium change, 2026 to 2027 | +13% (KFF)10 |
What changed for Marketplace coverage?
The enhanced credits expired. From 2021 through 2025, temporary rules lowered the share of income households were expected to pay and removed the 400% income cap. Those rules applied only to tax years beginning before January 1, 2026.1 The enhanced credits have expired,10 we found no enacted extension as of November 6, 2026, and the IRS’s 2027 table is the regular one.5
The 400% cliff is back. The credit is available only when household income is from 100% to 400% of the federal poverty line.1 For 2027 coverage, the Marketplace uses the 2026 poverty guidelines.6,7 The expected contribution for households between 300% and 400% is 10.22% of income for 2027, up from 9.96% for 2026.5,23 Above 400%, the credit isn’t reduced; it’s zero.
Repayment is uncapped. Section 71305 of Public Law 119-21 struck the provision that limited how much excess advance credit a household had to pay back.2 The IRS says that beginning with tax year 2026 the full excess must be repaid.3,4 For comparison, under the 2025 rules a single filer between 300% and 400% of the poverty line repaid no more than $1,625.19 The first returns without the cap will be filed in early 2027.10
Premiums rose again. KFF reports that finalized benchmark silver premiums for 2027 are up 13% on average, after a 26% increase for 2026. For a 40-year-old, benchmark premiums are up 42% on average from 2025 to 2027.10
Why are the self-employed most exposed?
Advance payments are based on the income you project when you enroll. W-2 employees usually know that number. Business owners, contractors and anyone expecting a large capital gain often don’t. If 2026 income comes in higher than projected, the difference between the advance payments and the credit you actually qualify for is added to your 2026 tax.1,3 Cross 400% of the poverty line by a dollar and the entire year’s advance credit comes back.
How much can a wrong estimate cost?
| Scenario | MAGI | Credit allowed | Repaid at filing |
|---|---|---|---|
| Estimate at enrollment (200% of the poverty line); advance credit paid during the year | $31,920 | $6,235.82 | — |
| Actual income higher | $60,000 | $2,268.00 | $3,967.82 |
| Actual income exactly 400% | $63,840 | $1,875.55 | $4,360.27 |
| Actual income just over 400% | $64,000 | $0.00 | $6,235.82 |
| Same $64,000, less a $1,000 SEP contribution | $63,000 | $1,961.40 | $4,274.42 |
The poverty-line figures and 2027 percentages come from HHS and the IRS; the premium is hypothetical, and the example ignores state subsidies and the interaction with the self-employed health insurance deduction described below.5,6 Under the 2025 rules, the second scenario’s repayment would have stopped at $1,625.19
Two lessons stand out. Near the cliff, $160 of extra income can cost more than $1,800 of credit. And a deduction that lowers modified AGI can be worth far more than its face amount: here, $1,000 put into a SEP restores $1,961.40 of credit, before counting the income tax the deduction itself saves.
What can you control?
- Update your income estimate with the Marketplace when it changes. The IRS and HealthCare.gov both point to mid-year updates as the way to keep advance payments in line with the credit you’ll actually be allowed.3,20
- Use deductions that lower modified AGI. For the premium tax credit, modified AGI is adjusted gross income plus excluded foreign income, tax-exempt interest and nontaxable Social Security benefits.1 Deductible contributions to a SEP or solo 401(k), HSA contributions, the deductible half of self-employment tax and the self-employed health insurance deduction all reduce AGI.14,22 Roth contributions don’t. SEP contributions for 2026 can generally be made up to the due date of your return, including extensions.24
- Consider an HSA-eligible plan. Beginning in 2026, bronze and catastrophic plans offered through an Exchange are treated as high-deductible health plans, so enrollees can contribute to a health savings account.2,11 The limits are $4,400 self-only and $8,750 family for 2026, and $4,500 and $9,000 for 2027.12,13 Direct primary care fees of up to $150 a month, or $300 for more than one person, no longer disqualify you from contributing.2,12
- Watch employer coverage in the household. If you or your spouse can enroll in a subsidized employer plan, you lose the self-employed health insurance deduction for that month even if you don’t enroll, and an offer of affordable employer coverage generally blocks the premium tax credit as well.1,14
How does the self-employed health insurance deduction fit in?
Self-employed people can deduct health insurance premiums for themselves, a spouse, dependents and children under 27 above the line, limited to the earned income from the business under which the plan is established, and not for any month in which they or their spouse are eligible for a subsidized employer plan.14 Two rules trip people up.
You can’t deduct what the credit paid. The deduction covers premiums you actually bore, not the portion paid by the premium tax credit.16 Because the deduction lowers the income that sets the credit, and the credit sets the deductible premium, Rev. Proc. 2014-41 provides two ways to compute them together: an iterative calculation and an alternative calculation.17 Publication 974 calls the second the simplified method and notes it is shorter but in some cases less favorable.18
S-corporation owners need the premiums on a W-2. For a shareholder owning more than 2%, the S corporation must pay or reimburse the premiums and report them as wages on the shareholder’s Form W-2. Premiums you pay personally without that step don’t qualify.15 It has to happen within the payroll year, so December is the time to confirm it. A qualified small employer HRA can’t cover a more-than-2% shareholder.21
One open point for 2026 returns: the regulation that coordinates the deduction with the credit still refers to the repayment cap that no longer exists, and the IRS hasn’t updated it or the related revenue procedure.16,17 The logical reading is that repaid excess credit counts as premium you bore, but we’d model 2026 returns carefully until the IRS confirms it.
When is open enrollment for 2027 coverage?
On HealthCare.gov, open enrollment runs from November 1, 2026 through January 15, 2027. Enroll by December 15 for coverage that starts January 1; plans selected from December 16 through January 15 start February 1.8 CMS confirmed those dates in an August 4, 2026 statement.9 A 2025 federal rule would have shortened open enrollment, but a federal court vacated that provision in June 2026 and the government’s appeal is pending.10,25 If your state runs its own exchange, check its dates directly.
KFF also reports that for plan year 2027, people won’t lose eligibility for advance credits because they failed to file and reconcile credits for prior years.10
A year-end checklist for 2026 and 2027
- Project 2026 household income now and compare it with what you told the Marketplace. If it’s higher, estimate the repayment and cover it, for example through the fourth-quarter estimated payment due January 15, 2027.
- Decide on 2026 retirement contributions with the credit in mind. Solo 401(k) salary deferrals generally must be elected by December 31; SEP contributions can be made up to the return due date, including extensions.24
- If you own an S corporation, confirm your health premiums are on your 2026 W-2.15
- For 2027, enter a realistic income estimate, consider an HSA-eligible bronze plan and calendar a mid-year income check.
- Keep Form 1095-A when it arrives; you need it to complete Form 8962.19