On July 4, 2025, the Big Beautiful Bill was signed into law, and some very important updates are being made within the Affordable Care Act that may affect your tax credit eligibility in 2026.
Starting August 25, 2025, there will no longer be a year-round Special Enrollment Period (SEP) for those whose tax households are at or below 150% of the Federal Poverty Level (FPL). While some would argue this hurts a low-income and vulnerable demographic, it is primarily intended to limit fraud. A small number of agents have fraudulently used this SEP to change income levels during the year for individuals who are not their clients. This has created havoc for enrollees, agents and the program. While other safeguards have been instituted, full elimination of this SEP is a further attempt to prevent fraudulent enrollments.

Further fraud will be targeted by reinstituting proof of Loss of Coverage and income levels.

The biggest impact the changes in the BBB will have is for those earning at or above 400% of the FPL. Between 2008 and 2021, there was an income “cliff” that prevented anyone above the 400% FPL to receive any Advance Premium Tax Credits to assist with the cost of health insurance. The 2021 America Rescue Plan Act removed the “cliff” and instituted a “slope” of diminishing tax credit eligibility for higher income individuals. For people making unexpected income during the year, the “slope” reduced the risk of having to pay back $20,000 to $30,000 of tax credit at tax time.

Starting again with 2026 enrollments, this income “cliff” is being reintroduced. Those most likely to be impacted are early retirees not yet eligible for Medicare and small business owners whose incomes are hard to predict.

Number of People in Tax Household 150% 400%
1 $23,475 $62,600
2 $31,725 $84,600
3 $39,975 $106,600
4 $48,225 $128,600

(aspe.hhs.gov)

The enrollment period for Marketplace plans has also been shortened by 30 days to November 1 to December 15, whereas the enrollment period previously lasted until January 15. It will be important to find a local and licensed insurance agent to help you navigate these changes and help you explore other options that may be more suitable than ACA coverage in 2026.

Let the licensed insurance agents at On Point Insurance Agency help you navigate 2026 coverage options.

For more information, visit (insuranceonpoint.com).