ACA Eligibility: Understanding MAGI and Minimum Income Thresholds

Are you looking for affordable health insurance options under the Affordable Care Act (ACA)? Understanding Modified Adjusted Gross Income (MAGI) and minimum income thresholds is crucial for qualifying for ACA coverage.

What is MAGI?

MAGI is a measure of your income used to determine your eligibility for certain government programs, including ACA health insurance. It’s calculated by taking your Adjusted Gross Income (AGI) from your tax return and adding back certain deductions and exclusions.

Minimum Income Thresholds

To qualify for ACA subsidies, you must have a MAGI that falls between 100% and 400% of the Federal Poverty Level (FPL). For 2024, the minimum income threshold to qualify for ACA coverage is calculated as 138% of the FPL, which is approximately $16,643 for a single person.

How MAGI Impacts Eligibility

To qualify for ACA coverage, your MAGI must exceed the minimum income threshold. If your MAGI is too low, you may not be eligible for subsidies, and you may have to pay the full cost of health insurance.

Calculating Your MAGI

To calculate your MAGI, you’ll need to start with your AGI from your tax return. AGI includes your wages, salaries, and other forms of taxable income, such as dividends and capital gains.

Next, you’ll need to add back certain deductions and exclusions that are not allowed when calculating MAGI. These may include:

Student loan interest deductions
IRA contributions
Health Savings Account (HSA) contributions
Alimony payments

In the example provided in the post, the individual has $10,000 in capital gains and dividends and a $6,700 IRA distribution. Since capital gains and dividends are part of AGI, the MAGI for this individual is $16,700.

Qualifying for the ACA

If your MAGI exceeds the minimum income threshold, you may be eligible for ACA subsidies that can help lower the cost of health insurance. These subsidies are available to individuals and families who earn up to 400% of the FPL.

To apply for ACA coverage, you can visit the Health Insurance Marketplace at You will need to provide information about your income, household size, and other factors to determine your eligibility.

If you have questions about MAGI, minimum income thresholds, or ACA eligibility, it is recommended that you seek the assistance of a licensed agent. They can help you understand your options and guide you through the application process.

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