A single parent in Utah: the tax credit for 2027 coverage

Melissa Turner is 42 and the administrative supervisor at a small architecture firm in downtown Salt Lake City. The firm doesn’t offer health insurance. Melissa and her daughter, Ava, 14, rent half of a duplex in the Avenues, and most mornings Melissa takes the bus down the hill to work.

Melissa is the only income in the house. In early December 2026, during open enrollment, she applies on HealthCare.gov for a plan that covers both of them from January 1, 2027.

Can a single parent earning $45,000 in Utah get help paying for a 2027 marketplace plan? Yes. For two people, that’s about 208% of the poverty guideline. She’s expected to pay about $266 a month toward the benchmark Silver plan for both, and the tax credit covers the rest of its premium. Silver adds the smallest cost-sharing reduction.

Melissa and Ava are fictional. The rules in their story come from HealthCare.gov, CMS, HHS, the IRS and the Utah Insurance Department.

How the tax credit works, in brief

Open enrollment for 2027 coverage runs from November 1, 2026 to January 15, 2027. In Utah, people enroll through HealthCare.gov. A plan picked by December 15 starts January 1. A plan picked from December 16 to January 15 starts February 1.

• Who can get the credit. Households with income from 100% to 400% of the poverty guideline, buying through the marketplace, who can’t get other qualifying coverage such as Medicaid, CHIP or affordable job-based coverage. There is no credit above 400%.
• How it’s figured. A household is expected to pay a set share of its income, the “applicable percentage”, toward the benchmark plan: the second-lowest-cost Silver plan where it lives, for the people enrolling. The credit covers the rest of the benchmark’s premium. Pick the benchmark itself, and the premium after the credit is the expected contribution, whatever the plan’s price. A pricier plan costs more than that, and a cheaper one costs less. The credit can be used on any metal level.
• When prices rise. The expected contribution is set by income. So when the benchmark’s premium goes up, the credit goes up with it, for the same income and household.
• The 2027 percentages. They run from 2.15% for incomes under 133% of the poverty guideline to 10.22% from 300% to 400%. The larger credits of 2021 to 2025, often called the enhanced credits, ended after 2025.
• Cost-sharing reductions. These come only with a Silver plan. Higher actuarial value means the plan pays a bigger share of covered costs, through lower deductibles and copays. A standard Silver plan is 70%. From 100% to 150% of the poverty guideline, the level is 94%; over 150% to 200%, 87%; over 200% to 250%, 73%, the smallest step. Above 250%, there are none.
• Children first. The application checks children for Medicaid and CHIP first. Children’s limits are higher than adults’. A child who qualifies can’t get the premium tax credit.
• Children’s dental. In HealthCare.gov’s words, “Dental coverage is an essential health benefit for children.” It comes either as part of a health plan or as a separate dental plan. Dental coverage isn’t an essential health benefit for adults.
• Settling up. The credit is based on income for the whole calendar year and is settled at tax time, with no repayment cap for tax years after 2025. Changes in income and household members must be reported within 30 days.

Melissa’s story

One paycheck

Melissa has raised Ava on her own for most of Ava’s life. There is no second paycheck in the house and no second employer’s plan to fall back on. A week of sick days, or one large medical bill, comes out of the same budget as the rent and Ava’s volleyball fees.

In 2026 she had a Bronze plan for the two of them, picked because it had the lowest monthly premium. In April, Ava rolled an ankle at practice, and the urgent care visit and the X-ray went toward the deductible. Melissa paid the bill over three months. The ankle healed, but the bill made her look harder at how she’d chosen.

The rate news

In October, Melissa reads that Utah’s marketplace insurers will raise their 2027 rates by 3.89% to 15.75%, depending on the insurer, and that the Utah Insurance Department has accepted them. On one income, the top of that range worries her.

The way the credit is figured answers most of that worry. Her expected contribution comes from her income, not from any plan’s price. When the benchmark’s premium goes up, the credit goes up with it. For the benchmark plan, a higher price lands on the credit, not on her.

That holds for the benchmark only. A plan priced above it costs her more than her expected contribution, and one priced below it costs less, so she compares plans again.

Her estimate

Melissa claims Ava as a dependent, so the household is the two of them. Ava has no income of her own. HealthCare.gov lets wage earners subtract the amounts an employer takes out of their pay for child care, health coverage and retirement plans. Nothing comes out of Melissa’s pay for any of those, so her estimate is her 2027 salary: $45,000.

For 2027 coverage, the poverty guideline for two people is $21,640, so $45,000 is about 208% of it. That puts her expected contribution toward the benchmark at about $266 a month for the two of them.

Ava first

The application checks Ava for Medicaid and CHIP first. Children’s limits are higher than adults’, but at their income, Ava doesn’t qualify. She goes on her mother’s marketplace plan, and the benchmark the credit is figured from covers both of them. A family with somewhat lower income might see a child qualify for CHIP instead.

Melissa is far from Medicaid herself. Utah expanded Medicaid, so adults qualify on income alone below 138% of the poverty guideline, about $29,863 for two.

The smallest step

At about 208%, a Silver plan comes with a cost-sharing reduction at the 73% level. That’s the smallest of the three steps, 3 points over a standard Silver plan’s 70%. The 200% line for two is $43,280, which is $1,720 below her estimate; under it, the level would be 87%. Melissa doesn’t shade her estimate to get there. Her salary is $45,000.

A cheaper plan would lower her monthly payment, which is what she did in 2026. A Silver plan at 73% pays a somewhat bigger share of covered costs, through lower deductibles and copays. With a 14-year-old who plays volleyball, she decides the bigger share is worth it.

She picks the benchmark: the second-lowest-cost Silver plan for the two of them. After the credit, it costs her about $266 a month, whatever its price before the credit. First, she looks up Ava’s pediatrician and her own doctor in the plan’s provider directory and calls both offices to confirm they’re in the network. They are.

Dental for Ava

Children’s dental can come as part of a health plan or as a separate dental plan, so Melissa reads the plan’s documents to see which. Here it’s part of the plan, and Ava’s dentist is in its network. Dental coverage isn’t an essential health benefit for adults, so Melissa’s own dental care is a separate question, and she sets it aside for now.

Saturday, December 5

On Saturday, December 5, with Ava at a volleyball tournament in Sandy, Melissa finishes the application at the kitchen table. She enters the $45,000 estimate, lists Ava as her dependent, compares the Silver plans one more time and picks the benchmark. That’s 10 days before December 15, so coverage starts January 1, 2027. Before she closes the laptop, she sticks a note on the fridge: report any change in pay within 30 days.

The year ahead

Melissa plans to compare her pay stubs with her estimate every few months. If her income comes in higher than the estimate, she’ll repay the extra advance credit at tax time, every dollar of it, because there is no repayment cap for tax years after 2025. If it comes in lower, she may get more back.

If the firm ever offers health insurance, the credit could change: in 2027, an offer counts as affordable for Melissa if her share for self-only coverage is no more than 10.22% of household income, and for Ava it’s judged on the cost of family coverage.

A 73% plan still has deductibles and copays. What’s different this year is that Melissa knows her monthly number and knows it’s set by her income.

The numbers

Here is the arithmetic, step by step. The poverty guidelines are the ones used for 2027 coverage, and the percentages are the IRS’s for 2027.

Step 1. Household: 2 people, Melissa and Ava. Income: $45,000 of expected 2027 wages.

Step 2. Poverty guideline for 2 people: $21,640. $45,000 divided by $21,640 is 2.08, or about 208%.

Step 3. Applicable percentage. Between 200% and 250%, it rises on a sliding scale from 6.78% to 8.66%. 208% is about 8 points into that 50-point band, or 16% of the way. 16% of the 1.88-point rise is about 0.30, so the percentage is about 7.08%.

Step 4. Expected contribution: $45,000 times 7.08% is about $3,186 a year. Divided by 12, that’s about $266 a month.

Step 5. The credit covers the rest of the benchmark’s premium for the two of them. Melissa picks the benchmark, so about $266 a month is her premium after the credit, even with Utah’s 2027 increases. Premiums depend on age, ZIP code, plan and insurer, so this example gives no dollar figure for a premium or for the credit.

Step 6. Cost-sharing reductions: 208% is over 200% and not over 250%, so a Silver plan comes at the 73% level, the smallest step.

The lines around her income

• 138%, about $29,863. Utah adults below it qualify for Medicaid on income alone.
• 200%, $43,280. It’s $1,720 below her income. Under it, a Silver plan’s level would be 87%.
• 250%, $54,100. It’s $9,100 above her income. Above it, there are no cost-sharing reductions.
• 400%, $86,560. There is no credit above it.

Under the old rules

These figures are for 2027. Under the larger credits of 2021 to 2025, which ended after 2025, her share would have been smaller.

What could go wrong

Reading the rate news as her own bill. For the benchmark plan, the credit takes the increase. For any other plan, her cost depends on its price compared with the benchmark.

Leaving it past December 15. A plan picked from December 16 to January 15 starts February 1. After January 15, open enrollment is over, and outside it a plan takes a Special Enrollment Period from a qualifying life event.

Expecting too much from 73%. It’s the smallest step, 3 points over a standard Silver plan. It helps with covered costs. It doesn’t remove deductibles or copays.

Shading the estimate toward a line. A lower estimate means a larger advance credit during the year, and the extra comes back at tax time, every dollar of it, with no repayment cap.

Not reporting a change. Changes in income, household members or address have to be reported within 30 days.

Questions to work through

Where does your income sit against the poverty guideline? For 2027 coverage it’s $21,640 for two people and $27,320 for three. Divide your expected household income by the figure for your household size.

Is your estimate near a line? For two people, 200% is $43,280 and 250% is $54,100, and the cost-sharing level changes at each. Estimate what you expect to earn, not what lands under a line.

Could your child get Medicaid or CHIP? The application checks children first, and their limits are higher than adults’. If your child qualifies, there’s no tax credit for that child’s marketplace coverage.

How is your child’s dental covered? It’s an essential health benefit for children, as part of a health plan or as a separate dental plan. Check which before you pick.

Are your doctors in the plan’s network? Look them up in the plan’s provider directory, then call the office to confirm.

Does your employer take anything out of your pay? HealthCare.gov lets wage earners subtract the amounts an employer takes out for child care, health coverage and retirement plans. A tax professional can confirm what’s deductible, and a licensed broker can work through your numbers with you.

The short version

Melissa raises Ava, 14, on one income. On $45,000, a household of two is at about 208% of the poverty guideline for 2027 coverage, so she’s expected to pay about 7.08% of income, about $266 a month, toward the benchmark Silver plan for both, and the credit covers the rest. Ava doesn’t qualify for Medicaid or CHIP at their income. Melissa picks the benchmark on December 5, in time for January 1, with the 73% cost-sharing level, the smallest step. Utah’s 2027 rate increases don’t change what the benchmark costs her. With no repayment cap, she reports income changes within 30 days.

This is a summary of how the rules work, not legal or tax advice. HealthCare.gov, your plan’s documents and your own tax situation have the final word.