The amount of premium assistance you can qualify for is determined by a sliding scale that depends on:
  • age
  • household income and size, and
  • the cost of affordable healthcare coverage in your geographic region 

Age and geographic region 

Premiums are calculated based on age and geographic region. For example, someone age 55 or older will pay a higher premium than someone under the age of 40. Additionally, someone age 55 in Southern California may pay a lower premium than someone age 55 in Northern California. Therefore, more assistance may be available to help consumers whose monthly premiums for coverage are more costly. 

 

Income, household size and affordable coverage

Under the Affordable Care Act, eligibility for subsidized health insurance is calculated using a household’s Modified Adjusted Gross Income (MAGI). You are expected to pay a premium contribution limit (a percentage of your annual income) for heatlhcare coverage. Each income level has a set premium contribution limit as noted in the last row of the FPL table below.
 
  Annual Income2
Household size1 400% of FPL and above 300% of FPL 200% of FPL Up to 150% of FPL
Individual $51,040 $38,280 $25,520 $0 - $19,140
Couple/2 people $68,960 $51,720 $34,480 $0 - $25,860
Family of 4 $104,800 $78,600 $52,400 $0 - $39,300
American Rescue Plan Act Premium contribution level3 Up to 8.5% of income Up to 6% of income Up to 2% of income $1/month
Source: Federal Poverty Level Guidelines (obamacarefacts.com)
1 Based on number of people reported on your tax return
2 Based on Modified Adjusted Gross Income (MAGI)
3 How much you’re expected to contribute toward premium cost. Should not exceed this limit.   

To calculate subsidy eligibility and amount, Covered California uses the second-lowest cost Silver (SLS) plan in your region, across all carriers, as the benchmark plan for “affordable coverage”. If the premium for the SLS benchmark plan exceeds your premium contribution limit for your income level, you may qualify for premium assistance because the benchmark plan is considered “not affordable”. This does not mean you are required to purchase the second-lowest cost Silver plan in your region. It’s just used as a benchmark for determining affordable coverage and available subsidy amount. You can use your subsidy to purchase any metal tier plan that fits your needs.   
 
Looking at the examples below, taking household size, income, and cost of affordable coverage into consideration, you can see a difference in subsidy eligibility comparing the Affordable Care Act (ACA) baseline to the American Rescue Plan Act. 
 
Here are a couple of examples: 

Example A: Erin and Francis

Ages: 62
Region: Live in a higher cost region
Annual Income: $73,270
FPL: 425%
Expected contribution toward premium cost: 8.5% of income

  Affordable Care Act baseline California Premium Subsidy New American Rescue Plan
Monthly Premium (SLS benchmark) $2,414 $2,414 $2,414
Federal Premium Subsidy (Advanced Premium Tax Credit) $0 not eligible because above 400% FPL n/a $1895
California Premium Subsidy n/a $1,574 n/a
Net Premium $2,414 $840 $519
Net Premium Income Share 40.2% 14.0% 8.5%


Example B: Jones Family

Ages: 40, 45, 12, and 18
Region: Live in a lower cost region
Annual Income: $157,200
FPL: 600%
Expected contribution toward premium cost: 8.5% of income

  Affordable Care Act baseline California Premium Subsidy New American Rescue Plan
Monthly Premium (SLS benchmark) $1,164 $1,164 $1,164
Federal Premium Subsidy (Advanced Premium Tax Credit) $0 not eligible because above 400% FPL n/a $50
California Premium Subsidy n/a $0 not eligible because net premium share (9.04%) is less than premium contribution level (18%) n/a
Net Premium $1,164 $1,164 $1,114
Net Premium Income Share 9.04% 9.04% 8.5%

Source: Federal Poverty Level Guidelines (obamacarefacts.com)
1Based on number of people reported on your tax return