2015 Federal Poverty Levels (FPL) For Affordable Care Act

Department of Health and Human Services Seal

People who don’t have health insurance from work can buy health coverage under the Affordable Care Act, also known as Obamacare. The premiums are made affordable by a premium subsidy in the form of a tax credit calculated off your income relative to the federal poverty levels (FPL), also known as HHS poverty guidelines.

You qualify for the premium subsidy only if your modified adjusted gross income (MAGI) is at 400% FPL or below. Modified Adjusted Gross Income for Obamacare is basically your gross income minus above-the-line deductions, plus tax-exempt muni bond interest, plus untaxed Social Security benefits. In order to see if you qualify for the premium subsidy, you have to know where the FPL is.

Here are the numbers for coverage in 2014, 2015, and 2016. They increase with inflation every year in mid-January. These are applied with a one-year lag. Your eligibility for a premium subsidy for 2015 is based on the FPL number announced in 2014. The new number announced in 2015 will be used for coverage in 2016.

There are three sets of numbers. FPLs are higher in Alaska and Hawaii than in 48 contiguous states and Washington DC.

48 Contiguous States and Washington DC

Number of persons in household 2014 coverage 2015 coverage 2016 coverage
1 $11,490 $11,670 $11,770
2 $15,510 $15,730 $15,930
3 $19,530 $19,790 $20,090
4 $23,550 $23,850 $24,250
more add $4,020 each add $4,060 each add $4,160 each

Alaska

Number of persons in household 2014 coverage 2015 coverage 2016 coverage
1 $14,350 $14,580 $14,720
2 $19,380 $19,660 $19,920
3 $24,410 $24,740 $25,120
4 $29,440 $29,820 $30,320
more add $5,030 each add $5,080 each add $5,200 each

Hawaii

Number of persons in household 2014 coverage 2015 coverage 2016 coverage
1 $13,230 $13,420 $13,550
2 $17,850 $18,090 $18,330
3 $22,470 $22,760 $23,110
4 $27,090 $27,430 $27,890
more add $4,620 each add $4,670 each add $4,780 each

Source:

[Photo credit: Flickr user DonkeyHotey]

See All Your Accounts In One Place

Track your net worth, asset allocation, and portfolio performance with free financial tools from Personal Capital.

Comments

  1. Steve Treisman says

    My adjusted gross income for 2014 is now expected to be in the 46,400 range. I signed up for Obamacare in December, 2013 starting in January 2014 and am receiving a subsidy. My subsidy was based on the 2013 FPL levels which I estimated my MAGI to be $45,000. When I reconcile my 2014 taxes do I reconcile using the 2013 or 2014 Federal Poverty level?
    400% of the FPL for 2014 is $46,680 which means I receive a subsidy.
    400% of the FPL for 2013 is $45,960 which means no subsidy and must be back the subsidy I received.
    Which one is correct? I am receiving conflicting answers. Thank you.

    • Harry Sit says

      It’s 2014 income against 2013 FPL. You are cutting it very close. A dividend payment or year-end capital gains distribution from your investments can throw you over. Please do all you can to manage it down, including making tax-deductible contributions to 401k, IRA, and HSA. See Stay Off the Obamacare Premium Subsidy Cliff.

  2. Kathy Kondrath says

    Like Steve, I have been receiving a subsidy since January. In August I made a substantial withdrawal from my IRA to pay for a new home because my home had not sold yet. I notified the marketplace & had my insurance switched to a different plan & subsidy amount. I was figuring I would come in at about the $43,000. income level but now it looks like it might be $46,500. I’m terrified. I was thinking of putting $6500 into a traditional IRA but I’ve seen conflicting info on whether that will lower my MAGI or not. Can you give me any input??? I will greatly appreciate any suggestions. Thank you!!

    • Harry Sit says

      Do you have earned income from working? You can only contribute to Traditional IRA if you have earned income. If you do, it will lower your MAGI.

  3. Sharon Long says

    I am 63 years old and am collecting Social Security. I earn about $11,500 per year from my job. How can I find how much of a subsidy I can receive to buy health insurance which I cannot afford without help.

  4. Rita Thoele says

    I was told by connectforhealthco (Colorado) that the poverty level for 2014 dropped to 200% to qualify for health insurance credits. Do you know if this is only applicable to CO or they don’t know the regulations?

    Thanks for any information.

  5. MSB says

    Are your 2014 FPL numbers $300 high across the board? My 2014 form 8926 says family of 4 FPL is $23,550–not 23,850.

    • Harry Sit says

      Please note the bold part. The numbers are applied with a one-year lag. 2013 numbers determine 2014 eligibility. 2014 numbers determine 2015 eligibility. 2015 numbers determine 2016 eligibility.

  6. Tim Carey says

    It is my understanding that $62920 is the max income for 2 people to be eligible for the tax credit for an ACA policy. Can you tell me how to calculate and what factors into the income total i.e. social security.dividends earned income,etc

    • Harry Sit says

      From the second paragraph: “Modified Adjusted Gross Income for Obamacare is basically your gross income minus above-the-line deductions, plus tax-exempt muni bond interest, plus untaxed Social Security benefits.”

  7. JohnInIowa says

    I was unaware of how Obamacare worked for early retirees. Thanks for the article, Harry.

    I’ve read that in retirement it’s generally attractive to spend down taxable funds first, and then retirement accounts (with Roth funds spent down last). That guidance had the advantage of being simple. However, the health insurance cliff that you mention appears to complicate things.

    Do you see any relatively simple rule, Harry, for deciding whether it’s worthwhile to go over the cliff during early retirement instead of taking money out of retirement accounts?

    • Harry Sit says

      It’s complicated. Among other things, it depends on how early is early, how much income you need, and how large a nest egg you have and where you have your assets. If early is 60, you can still go by that simple guidance. A large part of spending down taxable funds isn’t taxable. It’s easier to avoid the cliff. If early is 40, converting tax-deferred money to Roth is more important. The cliff is low when you are young. It isn’t too bad even if you go over it. All all ages, income bunching is also useful if you must go over the cliff.

  8. Brian says

    I feel sort of bummed about wanting to do IRA to Roth IRA contributions and not doing them before the ACA and before the value of said IRA went up…but I’m fortunate and that’s in the past…

    I’m having a difficult time determining as a one person household whether it’s worth losing a subsidy by doing the conversion versus potentially paying more taxes for even more funds converted in the future.

    Ssems like there should be an exemption to pay taxes on the conversion and still get a subsidy but I suppose savers often get hit with taxes for their responsible fiscal management, no?

  9. Eugene Laporte says

    I am qualifying for free health insurance due to my low income. My grandmother died and left me as a beneficiary on her IRA and I will receive about $10,000. Will that count in my income and disqualify me for any assistance this year? I am single and have about $8,000 in earned income..

    • Brian says

      Eugene-

      Talk to an accountant.
      That figure at most would reduce your subsidy, HOWEVER, it may be more like a tax-free GIFT, perhaps, especially if you can roll it into another IRA.

    • Harry Sit says

      If you make the IRA an inherited IRA and only take out the required minimum distribution every year, only the required minimum distribution counts as income. If you destroy the IRA and take it all out, the whole thing counts as income.

  10. Jan says

    What happens if your adjusted gross income falls below poverty level when you file your tax return? Based on best estimate in January, I was just above poverty level. I have taken credits each month against my premium. Thanks!

Leave a Reply

Your email address will not be published. Required fields are marked *