Healthcare Gov

California Health Exchange Tax Credits & Cost Sharing Subsidies

There are 2 different portions of government assistance in the California Health Exchange; a tax credit, and a cost sharing subsidy. In general, only median and lower income families will qualify for either of these.

How do the tax credits work in the Health Exchange? If you qualify for a tax credit, the government will pay part of your monthly health insurance cost, directly to the insurance company. The Health Exchange tax credits are applied automatically to your insurance bill every month, so you get the credit immediately and don’t have to wait to be reimbursed on your taxes.

Currently you only need to meet 2 criteria to qualify for a tax credit:

  • You must earn less than 400% of the Federal Poverty Level (FPL)
  • If your employer offers “affordable” health insurance through work, you are ineligible for a tax credit

The state considers the plan affordable if the cost to you is 9.5% of your total income or less. For example:

Monthly Income Your Monthly Cost For Plan Through Work % of Total Income Qualifies For Tax Credit?
$4,000 $400 10% Yes
$4,000 $360 9% No
$4,000 $200 5% No


So if the company you work for offers health insurance that they pay the majority of, you will probably not qualify for a tax credit through the California Health Exchange. Even if you don’t qualify for a tax credit, you can still purchase coverage through the exchange. The chart below lists the FPL based on your household size. These figures are subject to change.

Household Size 100% 133% 150% 200% 300% 400%
1 $11,490 $15,282 $17,235 $22,980 $34,470 $45,960
2 15,510 20,628 23,265 31,020 46,530 62,040
3 19,530 25,975 29,295 39,060 58,590 78,120
4 23,550 31,322 35,325 47,100 70,650 94,200
5 27,570 36,668 41,355 55,140 82,710 110,280
6 31,590 42,015 47,385 63,180 94,770 126,360
7 35,610 47,361 53,415 71,220 106,830 142,440
8 39,630 52,708 59,445 79,260 118,890 158,520
For each additional period, add $4,020 $5,347 $6,030 $8,040 $12,060 $16,080


What is a cost sharing subsidy in the Health Exchange? Some families will also qualify for a cost sharing subsidy, which operates differently.  With a subsidy, a lower income applicant can pay the cost of a lower tier plan, and get the benefits of a much better plan. If you earn between 138% – 200% of the FPL you will pay the cost of a Silver plan and get the benefit of Platinum. If you earn between 200% – 250% of the FPL you will pay the cost of Silver and get the benefit of Gold.The 4 different plans available in the health exchange are:

  • Bronze  – Pays 60% of your health expenses, you pay 40% (lowest rates)
  • Silver – Pays 70% of your health expenses, you pay 30%
  • Gold – Pays 80% of your health expenses, you pay 20%
  • Platinum– Pays 90% of your health expenses, you pay 10% (highest rates)

To summarize, a family earning 400% or less than FPL, that does not have access to affordable coverage through work, qualifies for a tax credit. A family earning less than 250% FPL and no affordable coverage through work qualifies for both a tax credit AND cost sharing subsidy.


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