NC Health Insurance Subsidies

Over the years health care costs have continued to rise drastically.  The government realizes that if North Carolinian’s are required to purchase health insurance then the government must also step up to the plate to help those that can’t afford to purchase the coverage on their own.

Because of this the Affordable Care Act outlines two types of NC health insurance subsidies available to folks that meet certain eligibility criteria.:

  1. Premium subsidies will be provided to individuals and families to lower the amount of monthly premium they pay.  This will be available for folks whose income is less than 400% Federal Poverty Level (FPL).
  2. Cost-sharing assistance are additionally available for individuals or families that are less than or equal to 250% FPL and they purchase a silver plan.  This limits the out of pocket costs for deductibles, coinsurance, copayments, etc.  Basically a plan upgrade without a premium upgrade.

In order to qualify for an ACA health insurance subsidy an individual/family must:

  • Be a citizen or national of the US or a lawfully present immigrant that files a tax return
  • Must purchase a plan inside the health insurance exchange
  • Household income must be below 400% FPL.  See chart below.
  • Cannot be eligible for “other acceptable coverage:”
    • Medicaid or Medicare
    • “Affordable” employer sponsored health coverage (may be eligible for subsidy if employee (self only) premium costs is greater than 9.5% of household income OR if the plan offered has an actuarial value of less than 60%)


[table caption=”2017 Federal Poverty Level (FPL) Chart” class=”table table-striped”  tablesorter=”0″]

“Household Size”, “100% FPL”, “250% FPL”, “400% FPL”
“1”, “$11,880″,”$29,700”, “$47,520”
“2”, “$16,020″,”$40,050”, “$64,080”
“3”, “$20,160”, “$50,400”, “$80,640”
“4”, “$24,300”, “$60,750”, “$97,200”
“5”, “$28,440”, “$71,100”, “$113,760”
“6”, “$32,580″,”$81,450”, “$130,320”
“7”, “$36,730″,”$91,825”, “$146,920”
“8”, “$40,890″,”$102,225”, “$163,560”
“For each additional ~~person, add”, “$4,160”, “$10,400”, “$16,640”

2016 FPL – ACA Subsidy chart – use this for 2017 coverage.  This will provide a more detailed breakdown.

Your premium subsidy is based on the second lowest Silver Plan (however, you are not required to purchase the silver plan).  The maximum premium amount allowed is defined as a percentage of the household income as related to FPL.

Income Level

(% of FPL)

Maximum Premium

(as % of Income)

Up to 133%


133 – 150%

3 – 4%

150 – 200%

4 – 6.3%

200 – 250%

6.3 – 8.05%

250 – 300%

8.05% – 9.5%

300 – 400%



Let’s look at a couple of Examples:

Example 1:  Mary is a 40 year old self employed Resident of Charlotte NC.  Her modified adjusted gross income (MAGI – find it here) for 2016 is $28,700 which is just below 250% FPL.  Mary visits the NC health exchange and finds that the 2nd lowest Silver Plan is $3600 per year ($300/mo).

Based on the above chart, the maximum Mary’s health insurance can cost her based on a percentage of her income is $2,310 annually (this is calculated by multiplying her $28,700 income by 8.05%).

Based on this information her available tax credit (which will be applied to her premium) would be $1,290 leaving Mary’s annual premium of $2,310 or $192.50/month.  In addition because Mary is just below 250% FPL she would qualify for enhanced benefits (cost share reductions, meaning lower deductibles and copays) without any additional premium cost.  These cost share reductions can be significant.

Example 2: The Jones’ are a self employed family of 4 (ages 40, 40, 12, and 8) with an annual income (MAGI) of $48,000 which is roughly 200% FPL.  The second lowest silver plan for them is $10,800 annually ($900/mo).

Based on the above chart, the maximum the Jones’ health insurance can cost them based on a percentage of their income is $2,961 annually (this is calculated by multiplying her $47,000 income by 6.3%).

Based on this information their available tax credit (which will be applied to their premium) would be $7,839 leaving the Jones’ annual premium of $2,961 or $246.75/month.  In addition, like Mary, because the Jones’ FPL is less than 250%; therefore they would qualify for enhanced benefits (lower deductibles and copays) without any additional premium cost.

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