The IRS has an exact definition: if the cheapest employee-only plan at work costs more than 9.96% of your household income in 2026, the offer is officially unaffordable — and you may qualify for ACA subsidies instead. Your family is tested separately, on the family premium. Most people have never run either number.
Free comparison against every plan filed in your county. No pressure, no obligation to enroll.
Educational estimate only. This tool applies the published IRS affordability percentage for plan years beginning in 2026 (9.96% of household income) and the separate family-coverage test in effect since 2023. It assumes the employer plan meets minimum value and does not cover ICHRA/HRA arrangements, which use a different test. Results are not a determination of eligibility for premium tax credits — only the applicable Health Insurance Marketplace or the IRS can make that determination. Smooth Health Solutions is not affiliated with or endorsed by HealthCare.gov, CMS, HHS, or the IRS.
Having an offer of coverage at work usually blocks you from ACA subsidies — but only if that offer is affordable by the IRS definition. For 2026 that means the cheapest self-only plan costs you no more than 9.96% of household income. Fail the test, and the block disappears: you can take a Marketplace plan with a premium tax credit.
Since the family glitch fix, there's a second test most families still don't know exists: your spouse and kids are measured against the family premium, not yours. It's common for the employee's own coverage to pass while the family tier fails — which means the family can get subsidized Marketplace coverage while the employee keeps the work plan. That split alone saves some households hundreds a month.
For plan years beginning in 2026: the cheapest self-only plan meeting minimum value must cost you no more than 9.96% of household income. Over that line, the offer officially fails and you may qualify for premium tax credits instead.
Before 2023, families were locked out of subsidies whenever the employee-only coverage was affordable — even if adding the family tripled the cost. Now family members are tested against the family premium. If that share tops the threshold, the family can get subsidies even while the employee stays on the work plan.
Only if the offer is unaffordable under the test or doesn't meet minimum value. If it passes both, you can still buy a Marketplace plan — just without the tax credit, which usually makes the job plan the better deal.
The plan must be designed to pay at least 60% of covered costs and substantially cover inpatient and physician care. Most traditional employer plans qualify; if yours doesn't, subsidies may be on the table regardless of the affordability math.
ICHRAs use a related but different affordability formula based on your HRA allowance and the lowest-cost silver plan where you live. This page doesn't cover it — call and I'll run the ICHRA version for you, free.
Estimate your credit with the subsidy calculator, check your enrollment window with the special enrollment checker, or read your state's 2026 cost guide: