How premium tax credits are calculated for North Carolina Marketplace plans in 2027 — with the new IRS percentages, a worked example, what changed when the enhanced subsidies expired, and the new full-repayment rule.
Written by the licensed agents at Health Plans of NC, an insurance agency authorized by Blue Cross NC.
A premium tax credit lowers your monthly premium for a Marketplace plan. It's based on the benchmark Silver plan in your area and a set share of your income.
For 2027, the IRS caps your expected contribution toward the benchmark plan at 2.15% to 10.22% of household income, depending on income.
Credits are available from 100% to 400% of the federal poverty level. The enhanced subsidies that reached above 400% expired after 2025.
Starting with tax year 2026, you must repay the full amount of any excess advance credit — there is no longer a cap.
Bronze and catastrophic Marketplace plans are HSA-compatible starting in 2026.
A premium tax credit is a federal subsidy that lowers what you pay each month for a plan bought through the Health Insurance Marketplace. North Carolina uses the federal Marketplace, so residents apply at HealthCare.gov.
You can have the credit paid in advance directly to your insurer each month, which lowers your bill right away. This is called the advance premium tax credit (APTC). Or you can pay full price and claim the credit when you file your federal tax return. Most people take it in advance.
The Marketplace compares two numbers.
The benchmark premium. This is the price of the second-lowest-cost Silver plan available to you, based on your county and ages. It varies widely across North Carolina.
Your expected contribution. This is a percentage of your household income. The IRS sets the percentages each year in Revenue Procedure 2026-26. For 2027:
Below 133% FPL: 2.15%
133% to 150% FPL: 3.23% to 4.3%
150% to 200% FPL: 4.3% to 6.78%
200% to 250% FPL: 6.78% to 8.66%
250% to 300% FPL: 8.66% to 10.22%
300% to 400% FPL: 10.22%
Your credit equals the benchmark premium minus your expected contribution. If the benchmark costs less than your expected contribution, you get no credit.
A worked example. Take a single adult in North Carolina with expected 2027 income of $31,920, which is 200% of the poverty level. At 200% FPL, the expected contribution is 6.78% of income, or about $2,164 a year — roughly $180 a month.
Suppose, for illustration, the benchmark Silver plan in that person's county costs $600 a month. The premium tax credit would be about $420 a month ($600 minus $180).
That $420 can go toward any metal level. On the benchmark Silver plan, the person pays about $180. On a Bronze plan priced at $450, they'd pay about $30. On a Gold plan priced at $700, they'd pay about $280. Actual prices depend on age, county, and carrier, so use real quotes before deciding.
The credit amount is fixed by the benchmark Silver plan, but the plan you choose decides what you actually pay — both in premium and when you use care.
Bronze. Lowest premium after the credit, sometimes close to zero, but the highest deductible. A fit if you rarely use care and could cover a large bill.
Silver. The benchmark. If your income is between 100% and 250% FPL, Silver is the only level with cost-sharing reductions, which can make it the best value by far.
Gold. Higher premium above the credit, but lower deductibles and copays. A fit if you expect regular care or ongoing prescriptions.
Check that your doctors, hospital, and prescriptions are covered before you choose. Networks and drug lists vary by plan, even within the same carrier.
You don't have to take the full credit in advance. At enrollment, you can take all of it, part of it, or none of it and claim what you're owed when you file.
Taking the full advance credit keeps your monthly bill lowest, which works well if your income is steady and predictable. If your income swings — commissions, self-employment, a possible raise, or a spouse changing jobs — taking part of the credit in advance builds a buffer. Because there's no longer a repayment cap, that buffer can prevent an unexpected tax bill.
At tax time, you reconcile advance payments on IRS Form 8962. If your actual income was lower than estimated, you may get more credit back. If it was higher, you owe the difference.
Starting with tax year 2026, there is no limit on that repayment, according to the IRS. Before, repayment caps protected many households from large bills. Now, if you underestimate 2027 income, you repay every dollar of excess credit. Report raises, new jobs, and household changes to the Marketplace promptly, and consider taking less than the full advance credit if your income is hard to predict.
From 2021 through 2025, temporary federal enhancements lowered the expected-contribution percentages — to as low as 0% at the bottom of the scale — and capped contributions at 8.5% of income even above 400% FPL. Those enhancements expired after 2025, and Congress has not renewed them.
Two effects carry into 2027. Most people who still qualify are expected to pay a larger share of income than they did in 2025. And households above 400% FPL get no premium tax credit at all, no matter how expensive coverage is. A 64-year-old couple just over the line can face the full, unsubsidized premium.
Cost-sharing reductions (CSRs) are a second subsidy. They lower your deductible, copays, and out-of-pocket maximum rather than your premium. They're available if your income is between 100% and 250% FPL, and only if you choose a Silver plan.
CSRs come in three levels. At 100% to 150% FPL, a Silver plan's cost-sharing becomes richer than a typical Platinum plan. At 150% to 200% FPL, it falls between Gold and Platinum. At 200% to 250% FPL, the reduction is smaller. If you qualify for CSRs, compare the enhanced Silver plan before picking a cheaper Bronze plan.
Yes, in more cases than before. Starting in 2026, all Bronze and catastrophic plans available through the Marketplace count as HSA-compatible, according to IRS guidance. HSA contributions are tax-deductible and can lower your MAGI, which may increase your premium tax credit or keep you under the 400% FPL line. See our comparison of FSAs and HSAs for the details.
Update your income estimate. Use your best projection of 2027 income, not last year's.
Check the benchmark in your county. Premiums and credits vary by county, and 2027 rates are rising. A higher benchmark usually means a larger credit if you qualify.
Compare total yearly cost. Weigh premium after credit, deductible, and out-of-pocket maximum. Our guide to comparing metal tiers can help.
Enroll on time. Open Enrollment runs November 1, 2026 through January 15, 2027, and you must enroll by December 15 for January 1 coverage. A licensed agent can run the numbers with you at no cost.
This article is for general information and is not insurance, legal, or tax advice. Contact a licensed agent or the Health Insurance Marketplace for guidance specific to your situation.