The money, plainly
How premium tax credits work — federal, and Colorado on top
Figures on this page checked . Medicare and marketplace numbers reset every year — if you are reading this long after that date, call and we will tell you what moved.
The federal credit, and the cliff that came back
The federal premium tax credit reduces your monthly premium based on your household size, your estimated income for the coverage year, and what a benchmark plan costs in your county.
The enhanced credits introduced in 2021 expired at the end of 2025 and were not renewed. That restored the original ACA subsidy cliff at 400% of the Federal Poverty Level — above it, federal help stops abruptly rather than tapering.
If you read somewhere that “nobody pays more than 8.5% of income”, that was the enhanced rule and it is gone federally. If you read that subsidies disappeared altogether, that is also wrong. Both halves of the internet are out of date in opposite directions.
Colorado Premium Assistance
Colorado responded with its own state-funded subsidy, Colorado Premium Assistance, which stacks on top of the federal credit for eligible households. It is applied automatically at enrollment.
- It has been extended through the 2027 plan year by Senate Bill 26-178, so it is not a one-year stopgap.
- In the 2026 plan year it reduced premiums for more than 176,000 people in Colorado.
- It is not a tax credit and does not run through your return, so nothing about it can be clawed back at tax time.
A third layer gets missed more often, and it attaches to one metal tier only. Below 250% of the Federal Poverty Level, a Silver plan and only a Silver plan comes with reduced deductibles, copays and out-of-pocket maximum, at no extra premium. Buy Bronze or Gold instead and you give it up. Below about 200% of the Federal Poverty Level, a Silver plan with that reduction applied covers more than a Gold plan does and costs less. The metal names say the opposite.
Then there are the Colorado Option plans, where the state sets the benefits rather than the carrier and primary care and mental health visits cost you nothing. Half the people who buy their own coverage in this state are in one, and most of them picked it on price without being told what else came with it.
All of which matters more for 2027 than usual. Colorado carriers have asked for an average increase of about 11% on individual plans — a request the Division of Insurance was still reviewing when we last checked, not an approved number, and an average across every carrier rather than anybody’s own bill. What you pay depends far more on the help you qualify for than on the list price.
Estimating income, and what happens if you’re wrong
You estimate your income for the coverage year when you apply. The federal credit is then reconciled on your tax return against what you earned. Guess high and you get money back. Guess low and you repay the difference.
This changed for the 2026 tax year
There used to be a ceiling on how much of that credit a household under 400% of the Federal Poverty Level had to give back. Congress removed it. For coverage from 2026 onward there is no cap, at any income — if you took more credit than your income entitled you to, you repay all of it. The first return this applies to is the return filed in early 2027, for tax year 2026.
That makes the income estimate a bigger deal than it was, and it hits hardest on people whose income is lumpy: a commission year, a good quarter, a contract that finally closed. It is not a reason to guess high out of fear, which costs you help every month you did not need to give up. It is a reason to tell the exchange when something changes.
In plain terms
Colorado Premium Assistance does not reconcile. It is not advanced against a tax return, so nothing on that portion is ever repaid. Everything above is about the federal credit only.
You can update your income estimate any time during the year, and you should. Telling the exchange in March is a small adjustment. Finding out in April is not, and we cannot tell you what you would owe — that is a question for whoever does your taxes.
Grove Benefit Advisors, LLC is a certified broker with Connect for Health Colorado and is not a government agency or the marketplace itself. Plan availability, networks, and pricing vary by county. Any savings figure shown here is illustrative; final eligibility for a premium tax credit is determined by Connect for Health Colorado on your application.
Questions about the money
I heard subsidies went away — do I still qualify for help?
Probably, and this is the most common wrong belief we hear. The enhanced federal credits expired at the end of 2025, but the original federal premium tax credit did not go anywhere, and Colorado Premium Assistance stacks on top of it.
The households most affected are those just over 400% of the Federal Poverty Level, where federal help now stops abruptly. Even there, run the numbers rather than assuming — the state layer and the cost-sharing program change the arithmetic.
Do I have to pay this back at tax time?
Only if you earned more than you estimated. The federal credit is reconciled on your tax return: come in lower and you get more back, come in higher and you repay the difference.
What changed is the size of that difference. Until the 2025 tax year there was a cap on how much a household under 400% of the Federal Poverty Level had to repay. Congress removed it for coverage years from 2026 on, so there is now no ceiling at any income. The first return that works this way is the one filed in early 2027.
Colorado Premium Assistance does not reconcile — there is no repayment on that portion, ever.
We will not tell you what you would owe, because that is your return and not ours. What we will do is update your estimate the week your income changes, which is the part that prevents it.
I’m self-employed — how do I estimate my income?
Your best projection of net self-employment income for the whole year, after business expenses — not gross receipts, and not this month multiplied by twelve.
Everybody in this position feels like they are guessing, and that is fine: the estimate is expected to be an estimate. Update it when a big contract lands or falls through rather than waiting for the year to end.