If you live in California and buy health insurance through Covered California, the amount you pay each month depends almost entirely on your income. The federal government and, in some cases, the state of California will cover part of your premium through a subsidy called the Advance Premium Tax Credit (APTC). This guide walks you through exactly how that calculation works, what the income cutoffs are for 2026, and how to check your own eligibility for free.
To skip straight to your numbers, use the free BenefitsUSA screener. It checks your income, household size, and ZIP code against current Covered California rules and gives you an estimate in minutes.
How the Subsidy Calculation Works
Covered California subsidies are not a flat dollar amount. They are calculated as the gap between two figures:
- The cost of the second-lowest-cost Silver plan in your county (called the "benchmark plan")
- The maximum amount the government expects you to pay, based on your income as a percentage of the Federal Poverty Level (FPL)
Your subsidy = Benchmark plan cost minus your expected contribution
If the benchmark Silver plan in your area costs $500 per month, and the formula says you should pay $150 per month, your APTC is $350 per month. That credit gets applied directly to your premium, so you only owe $150 to your insurer each month.
This means two people with the same income can get different subsidy amounts depending on where in California they live, because benchmark plan costs vary by county and age.
2026 Income Limits for Covered California
The income thresholds below use the 2025 Federal Poverty Level guidelines, which are the figures Covered California uses for 2026 plan year eligibility.
Covered California Eligibility by Household Size
| Household Size | Medi-Cal Limit (138% FPL) | APTC Lower Bound (138% FPL) | APTC Upper Limit (400% FPL) |
|---|
| 1 person | $22,025 | $22,025 | $62,600 |
| 2 people | $29,864 | $29,864 | $84,600 |
| 3 people | $37,703 | $37,703 | $106,600 |
| 4 people | $45,542 | $45,542 | $128,600 |
If your income falls below the 138% FPL threshold, you will likely qualify for Medi-Cal rather than a Covered California subsidized plan. Medi-Cal is California's Medicaid program and is generally free or very low cost.
If your income is above the 400% FPL cutoff, federal subsidies are no longer available for 2026. This is a significant change: the enhanced subsidies from the American Rescue Plan Act and the Inflation Reduction Act that had extended help to higher incomes expired on December 31, 2025.
What Percentage of Your Income You Pay
The calculation centers on a sliding scale. The higher your income relative to the poverty level, the higher your expected contribution toward the benchmark Silver plan.
2026 Expected Contribution Percentages
| Income Level | % of FPL | Max % of Income You Pay for Benchmark Plan |
|---|
| Very low income | Up to 150% | 0% to 4.1% |
| Low income | 150% to 200% | 4.1% to 6.5% |
| Moderate income | 200% to 250% | 6.5% to 8.3% |
| Middle income | 250% to 300% | 8.3% to 9.5% |
| Higher moderate | 300% to 400% | 9.5% to 9.8% |
| Above limit | Over 400% | No federal subsidy |
These percentages are higher in 2026 than they were in 2024 and 2025, when enhanced subsidies were in effect. If you received a subsidy in prior years, your premium may have increased for 2026 coverage.
Worked Examples at Different Income Levels
The examples below assume a 40-year-old single person in Los Angeles. Benchmark plan costs vary by county, so treat these as illustrative estimates using a hypothetical benchmark of $550 per month.
Example 1: Income at 150% FPL (approximately $23,475 per year)
- Max expected contribution: about 4.1% of income = $960 per year = $80 per month
- Estimated subsidy: $550 minus $80 = approximately $470 per month
Example 2: Income at 200% FPL (approximately $31,300 per year)
- Max expected contribution: about 6.5% of income = $2,035 per year = $170 per month
- Estimated subsidy: $550 minus $170 = approximately $380 per month
Example 3: Income at 300% FPL (approximately $46,950 per year)
- Max expected contribution: about 9.5% of income = $4,460 per year = $372 per month
- Estimated subsidy: $550 minus $372 = approximately $178 per month
Example 4: Income at 400% FPL (approximately $62,600 per year)
- Max expected contribution: about 9.8% of income = $6,135 per year = $511 per month
- Estimated subsidy: $550 minus $511 = approximately $39 per month
Example 5: Income above 400% FPL
- No federal subsidy. You pay full premium.
Your actual numbers will differ based on your county, age, household size, and the specific benchmark plan cost in your area. Use the BenefitsUSA screener to get an estimate based on your actual situation.
California State Subsidy for 2026
California added its own state subsidy program in 2026 to partially offset the expiration of enhanced federal subsidies. The state program targets the lowest-income Covered California enrollees.
- Households at or below 150% FPL: near-zero premiums maintained through California's state subsidy
- Households between 150% and 165% FPL: reduced premiums through a partial state subsidy
- Households above 165% FPL: no California state subsidy, federal APTC only (if below 400% FPL)
California allocated roughly $190 million to fund this program, which benefits approximately 333,000 enrollees. If your income is below 165% FPL, you may qualify for both the federal APTC and the California state subsidy stacked together.
Cost-Sharing Reductions (CSR): Lower Deductibles and Copays
If your income is between 138% and 250% FPL, you qualify for Cost-Sharing Reductions in addition to the premium subsidy. CSRs reduce your deductible, copays, and out-of-pocket maximum, making the insurance more useful when you actually need care.
CSRs are only available if you enroll in a Silver plan. The enhanced Silver tiers work as follows:
| Income Range | Silver Plan Version | Actuarial Value |
|---|
| 138% to 150% FPL | Silver 94 | 94% (comparable to Platinum) |
| 150% to 200% FPL | Silver 87 | 87% (comparable to Gold) |
| 200% to 250% FPL | Silver 73 | 73% (standard Silver) |
| Above 250% FPL | Standard Silver | 70% |
Actuarial value tells you roughly what percentage of your health costs the plan covers on average. A Silver 94 plan at 150% FPL has the coverage quality of a Platinum plan but costs far less because of the premium subsidy and CSR stacked together.
What Counts as Income for Covered California
Covered California uses your Modified Adjusted Gross Income (MAGI), which includes:
- Wages and salaries
- Self-employment income
- Unemployment compensation
- Social Security benefits (if taxable)
- Investment income and capital gains
- Alimony received (for agreements before 2019)
- Rental income
It does not include Supplemental Security Income (SSI), child support received, or workers' compensation.
For household income calculations, Covered California counts the income of everyone in your tax household who is required to file a tax return. If you are applying with a spouse and two dependents, your household income is the combined income of you and your spouse.
How to Apply for Covered California
- Check your estimated income. Use the tables above to see where your income falls relative to the FPL. The BenefitsUSA screener can help if you are unsure.
- Gather your documents. You will need Social Security numbers for all household members, income information (pay stubs, tax returns, or estimated self-employment income), and immigration documents if applicable.
- Create a Covered California account. Go to coveredca.gov and start an application. You can also call 1-800-300-1506 or work with a certified enrollment counselor.
- Complete the application. Enter your household information, income, and current coverage status. The system will tell you whether you qualify for Medi-Cal, APTC, or CSR.
- Compare plans. Review the available Bronze, Silver, Gold, and Platinum plans in your area. If you qualify for CSR, pay close attention to Silver plan options since that is where the CSR benefit lives.
- Enroll and pay your first premium. Once you select a plan, your coverage begins on the first day of the following month (or January 1 for open enrollment). You must pay your first premium to activate coverage.
Open Enrollment vs. Special Enrollment
Open enrollment for 2026 coverage ran from November 2025 through January 2026 for most applicants. Outside of that window, you can only enroll or switch plans if you have a qualifying life event.
Qualifying events for a Special Enrollment Period include:
- Losing other health coverage (job loss, COBRA expiration, loss of Medi-Cal)
- Getting married or divorced
- Having or adopting a child
- Moving to a new county or state
- Gaining lawful immigration status
California also has a permanent special enrollment option: if your income drops below 150% FPL at any point in the year, you can enroll without waiting for open enrollment.
Why 2026 Is a Tougher Year for Subsidies
The enhanced ARP/IRA subsidies that were in effect from 2021 through 2025 made coverage more affordable at almost every income level. Two key things those programs did that have now expired:
- They capped your contribution at 8.5% of income regardless of how high your income went, eliminating the subsidy cliff at 400% FPL.
- They pushed contribution percentages lower across all income tiers, meaning larger subsidies for everyone.
With those enhancements gone as of December 31, 2025, the contribution percentages shown in the table above are higher than they were last year. Households above 400% FPL receive no federal help at all. California's state subsidy fills part of the gap for the lowest-income enrollees, but there is no state-level equivalent for households above 165% FPL.
If you enrolled in Covered California in 2025 and have not revisited your coverage for 2026, your current premium may be higher than expected, even if your income has not changed.
Check Your Eligibility for Free
The BenefitsUSA screener at benefitsusa.org/screener checks your income and household situation against current Covered California rules and tells you which programs you likely qualify for, including:
- Medi-Cal (if your income is below 138% FPL)
- Federal APTC through Covered California
- California state subsidy (if below 165% FPL)
- Cost-Sharing Reductions
- Other California assistance programs
The screener is free, takes about three minutes, and does not require you to create an account or share contact information unless you want help enrolling. You can also visit benefitsusa.org/states/california for a full overview of California's health and social assistance programs.
Frequently Asked Questions
How do I calculate my Covered California subsidy?
Start with your annual household income and divide it by the Federal Poverty Level for your household size. That gives you your FPL percentage. Then find your income tier in the contribution percentage table above. Multiply your income by that percentage to get your expected annual contribution. Divide by 12 for the monthly amount. Your subsidy equals the benchmark Silver plan cost in your county minus your monthly expected contribution.
What is the income limit for Covered California subsidies in 2026?
For 2026, federal APTC subsidies cut off at 400% of the Federal Poverty Level. That is $62,600 for a single person, $84,600 for a household of two, $106,600 for three, and $128,600 for a household of four. Above those amounts, no federal subsidy is available.
What is the minimum income to qualify for Covered California?
To qualify for a subsidized Covered California plan, your income must be at least 100% of FPL. For a single person that is approximately $15,650 per year. Below that level, and below 138% FPL for most Californians, you would typically qualify for Medi-Cal instead.
Do I have to pay back my subsidy if my income changes?
If your actual income ends up higher than what you estimated on your application, you may need to repay some of the APTC when you file your federal tax return. If your income is lower than estimated, you may receive an additional credit. Update your income in Covered California as soon as it changes to minimize the difference.
What is the California state subsidy for 2026?
California reinstated a state premium subsidy program for 2026 to partially offset the expiration of enhanced federal subsidies. It covers households earning up to 165% FPL, with near-zero premiums maintained for those at or below 150% FPL. The program benefits approximately 333,000 Covered California enrollees.
Does the ACA subsidy cover dental or vision?
No. The APTC applies only to medical health insurance plans offered through Covered California. Dental coverage is sold separately on the marketplace and is not subsidized through APTC. Vision coverage for adults is not offered through Covered California.
Can I get Covered California if I have a job that offers insurance?
Yes, but only if your employer's plan is considered unaffordable or does not meet minimum value standards. If your employer offers coverage that costs more than approximately 9.02% of your household income for self-only coverage in 2026, your employer plan may be considered unaffordable and you could qualify for APTC through Covered California instead.
How long does it take to get approved?
Most Covered California applications are processed immediately online. You will receive a determination the same day in most cases. If additional documentation is needed, verification can take up to 90 days, but you can typically enroll and start coverage while verification is pending.
