Alvaro Gonzalez | Moment | Getty Images<\/p>\n
More from Financial Advisor Playbook:<\/p>\n
Here’s a look at other stories affecting the financial advisor business.<\/p>\n
Here are some key things to know about ACA health insurance subsidies \u2014 and how changes could impact future Roth conversions.<\/p>\n
How the ACA health insurance subsidies work<\/p>\n Enacted via the Affordable Care Act, the premium tax credit<\/a> was designed to make marketplace health insurance more affordable for Americans with incomes between 100% and 400% of the federal poverty level.<\/p>\n In 2021, Congress expanded eligibility above 400% of the federal poverty level, a benefit that <\/strong>was extended through 2025. The legislation also capped a household’s out-of-pocket health insurance premium costs at 8.5% of income.<\/p>\n The higher eligibility for 2025 leaves “more room to create income” via Roth conversions while still leveraging a portion of ACA health insurance subsidies, according to Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida.\u00a0His firm is ranked No. 69 on CNBC’s Financial Advisor 100 <\/a>list for 2025.\u00a0<\/p>\n For 2025, the earnings threshold amounted to\u00a0$103,280 for a family of three<\/a>, according to The Peterson Center on Healthcare and KFF, which are health-care policy organizations.<\/p>\n However, the ACA subsidies were not addressed in President Donald Trump<\/a>‘s “big beautiful bill,” and will expire after 2025 without action from Congress.<\/p>\n Depending on what Congress decides, it could change how much income certain retirees choose to incur for future Roth conversions, Lucas said.<\/p>\n Of course, Roth conversion projections typically involve multiple factors beyond current-year tax implications, including long-term financial goals, lifetime taxes and legacy planning.<\/p>\n