Premium Tax Credits are Changing in 2026

Open enrollment for 2026 health plans begins November 1, and if you’ve been receiving financial help to buy coverage through Vermont Health Connect, you’ll want to pay attention to some potentially significant changes for next year.

First, the good news: Financial help to purchase Blue Cross VT health plans will continue to be available through Vermont Health Connect next year. Many Vermonters will still be eligible for federal premium tax credits offered through the Affordable Care Act, which can lower the cost of monthly premiums for health insurance.

The not-so-good news is the amount of financial help available next year will be less, and some people may no longer qualify for help. We’ll explain what’s happening and give you some suggestions on what to do.

Enhanced Premium Tax Credits Set to End

Since 2014, the Affordable Care Act has been providing subsidies, through federal tax credits, for people who buy health insurance on their own — not through an employer or Medicare. This includes people who are self-employed or retired early and are not yet eligible for Medicare. Millions of people throughout the country have been able to buy health coverage at affordable rates through federal or state marketplaces like Vermont Health Connect because of this program.

When Congress passed the American Rescue Plan Act in 2021 to help Americans recover from the effects of the COVID-19 pandemic, it expanded the size of the health insurance premium subsidies which increased the subsidy amounts received. People earning more than 400% of the federal poverty level (FPL) were able to qualify for enhanced subsidies. In 2022, Congress extended these enhanced subsidies for another three years.

These enhanced subsidies are scheduled to end on December 31, 2025. What does that mean for Vermonters? People with household incomes of more than 400% of the FPL won’t be able to get financial help through Vermont Health Connect anymore. In 2026, the 400% FPL limit will be $62,600 for a single person, and $128,600 for a family of four. Without the enhanced subsidies, some people will find that their health insurance premiums will cost more next year.

Vermonters with household incomes of less than 400% of the FPL may continue to get financial help in buying their health coverage. To be eligible for financial help you:

• Must not be enrolled in Medicare
• Must not be enrolled in or have an offer of affordable employer-sponsored health coverage
• Must enroll through Vermont Health Connect

You can learn if you’ll be eligible for financial help next year by visiting  Vermont Health Connect’s website or by calling them at (855) 899-9600.

What You Can Do Now

Congress still has time to act before the enhanced premium tax credits expire, so the situation could change by year’s end. However, we encourage you not to wait until the last minute. Here are some things you can do now to prepare:

• Make sure to read everything you receive from Vermont Health Connect, the Department of Vermont Health Access, and Blue Cross VT. In November, Vermont Health Connect will mail notices with information about 2026 subsidy amounts for those currently enrolled in a health plan through them.
• Gather your income documentation, such as recent pay stubs, W-2 forms, 1099 forms, and prior year tax returns. You’ll need this information to determine your eligibility for financial help for 2026. Vermont Health Connect asks for a projected 2026 household income amount to calculate any potential subsidies you or your family may qualify for.
• Update your Vermont Health Connect account. If your income, household size, or other information has changed, it could affect how much financial help you’ll qualify for next year.
• Review what your health care spending and costs were in 2025 and think about any health care you expect to get next year. This will help you decide which health insurance plan to enroll in for 2026.
• Use Vermont Health Connect’s plan comparison tool. You can enter your information, learn about financial help that’s available to you, estimate your health insurance costs, and compare plans side by side. Then enroll in the plan that’s the best fit. You can also use the Blue Cross VT plan comparison tool.

If you no longer qualify for a premium tax credit through Vermont Health Connect, you can buy a health plan directly from Blue Cross VT. We’ll be glad to help you choose the right plan and sign up! Please give us a call at (800) 255-4550 (TTY/TDD:711) or email consumersupport@bcbsvt.com. We’re available Monday – Friday, 8 a.m. to 4:30 p.m.