Advance Premium Tax Credits (APTCs) lower the monthly premium for a plan bought through the Exchange. Per the CDI outline, APTCs may be available to households with income not more than 400% of FPL. Federal law (IRC §36B) limits the credit to household income from 100% to 400% of the poverty line; the rule that removed the 400% ceiling applied only to tax years 2021 through 2025.

Who figures it and who gets paid: Covered California, the state's Exchange, calculates how much help a household qualifies for when it applies. The advance payment goes to the insurer, which lowers the premium on the enrollee's bill; the enrollee does not receive a monthly check. The outline says the Exchange pays the insurer; under federal law (42 U.S.C. §18082) the Secretary of the Treasury makes the payment to the issuer.

How much: the premium of the second lowest cost Silver plan (the benchmark) in the rating area, minus the share of household income the person is expected to pay. The credit cannot exceed the premium of the plan actually chosen, and it may be used with any metal tier.

Must buy through the Exchange: APTCs are available only if the person enrolls through the Exchange in a qualified health plan (QHP) that is not a catastrophic plan. In California, that means Covered California. The same Silver plan bought directly from the insurer gets no credit, even if income qualifies.

Reconciliation: the credit is reconciled on the federal tax return using Form 8962. If the advance payments were more than the credit allowed, for example because income was higher than estimated, the excess is added to the person's tax for the year. The insurer does not repay it.