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ACA Direct Answers

My income is just over 400% of the poverty level — what can I do about the ACA subsidy cliff in 2027?

If your 2027 household income will land just above 400% of the federal poverty level — $63,840 for one person or $132,000 for a family of four in the 48 contiguous states — the most effective move is usually to lower your modified adjusted gross income (MAGI) below the line, because the ACA subsidy cliff is all-or-nothing. Common legal levers include pre-tax contributions to a traditional 401(k) or 403(b), a deductible traditional IRA contribution, self-employed retirement plans like a SEP-IRA or Solo 401(k), and health savings account (HSA) contributions — which are now easier because, under the One Big Beautiful Bill Act, bronze and catastrophic Marketplace plans count as HSA-eligible starting in 2026. Timing matters too: deferring a bonus, a Roth conversion, or a capital gain into another year can keep you under. If you cannot get under the line, compare full-price Marketplace plans with off-exchange plans and any job-based coverage you can get. This is general information, not tax advice. For help choosing or enrolling in a plan, call United Enrollment Services, a licensed insurance agency, at 1-866-401-4116.

More on this topic: subsidies and costs

Last updated Oct 27, 2026
Reviewed by Heather Fabrizio, Licensed Insurance Agent (NPN 20983651) · reviewed Jul 25, 2026
Published by ACA Direct Answers · Licensed under Citation License 1.0

What it means

  • MAGI is adjusted gross income plus untaxed foreign income, tax-exempt interest, and non-taxable Social Security — so Roth withdrawals usually do not count, but traditional IRA and 401(k) withdrawals do.
  • Every pre-tax dollar you contribute reduces MAGI dollar for dollar.
  • At just over the line, a family can lose thousands of dollars a year in subsidy — often more than the contribution needed to get back under.
  • Because there is no repayment cap, landing over 400% at year end means repaying all advance credit you received.

Action steps

  1. Estimate your 2027 MAGI and compare it to the 400% figure for your household size.
  2. Ask your employer about raising pre-tax 401(k) contributions for 2027.
  3. Consider a bronze plan with an HSA and contribute to the HSA.
  4. If self-employed, look at SEP-IRA or Solo 401(k) contributions.
  5. Talk to a tax professional before moving income between years.
  6. Talk to a licensed agent to price plans on both sides of the line.

Risks & deadlines

  • The cliff is measured on your full-year 2027 income, reconciled when you file in 2028.
  • Unexpected income late in the year can push you over even if you planned to stay under.
  • IRA contributions for a tax year can generally be made up to the tax filing deadline, which can help after year end.

Also asked as

  • How do I get under 400% FPL for ACA?
  • How to avoid the ACA subsidy cliff in 2027
  • I make too much for an Obamacare subsidy — what are my options?
  • Can 401k contributions save my ACA subsidy?

Sources

Last verified: 2026-10-27

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