Under the Affordable Care Act, premium subsidies (premium tax credits) for marketplace health plans are primarily based on what factor?

ACA premium tax credits are calculated based on your projected household income as a percentage of the federal poverty level (FPL). Originally available to households earning between 100% and 400% of the FPL, the American Rescue Plan Act of 2021 expanded subsidies so that no one pays more than 8.5% of their income on benchmark plan premiums regardless of income level. These enhanced subsidies were extended through 2025 and possibly beyond. Subsidy amounts are reconciled on your federal tax return each year based on your actual income.