What changes to premium tax credit eligibility did the ARP make for people with incomes above 400% FPL in 2021 and were these made permanent by later legislation?

1. What ARPA changed in 2021: elimination of the 400% cliff and an 8.5% cap

ARPA eliminated the ACA rule that barred premium tax credits for households with incomes above 400% of the federal poverty line for the 2021 and 2022 plan years, leaving only the ACA’s minimum threshold (100% FPL) and making higher-income enrollees newly eligible for credits if premiums exceeded a defined share of income (IRS; Congress Research Service) ^{[1] [4]}. The law also effectively capped the maximum “applicable percentage” — the share of income a household must pay toward the benchmark plan — at 8.5 percent for those above 400% FPL, addressing the subsidy “cliff” where a small income increase had previously removed all help (CMS; Brookings) ^{[2] [3]}.

2. How the change worked in practice and who benefited

Practically, the ARPA changes meant that households previously priced out by the cliff could receive advance premium tax credits (APTC) that reduced monthly Marketplace premiums so that households would not pay more than roughly 8.5% of income for the benchmark silver plan; in some cases consumers still wouldn’t get a credit if benchmark premiums were low enough relative to income (CMS; HealthReformBeyondTheBasics) ^{[2] [6]}. Analysts and the Congressional Budget Office projected the expansion would lower net premiums for most enrollees and boost enrollment, with Brookings highlighting that applying an 8.5% applicable percentage to those above 400% FPL removed the abrupt loss of subsidies (Brookings; p1_s6).

3. Temporary nature and the subsequent legislative extension

ARPA’s elimination of the 400% ceiling was written as a temporary, pandemic-era relief measure for 2021–2022 (IRS; CRS) ^{[1] [4]}. Congress later extended those enhanced subsidies and expanded eligibility with the Inflation Reduction Act, which pushes the ARPA-style rules through the 2025 coverage year — not permanently — and federal guidance and CMS materials note the expanded eligibility is scheduled to expire on December 31, 2025 absent further legislation (HealthReformBeyondTheBasics; CMS; Congress.gov) ^{[6] [5] [4]}.

4. What “not permanent” means on the ground and competing forecasts

Because the policy was enacted as a temporary expansion and only extended through 2025, the baseline ACA rules — reestablishing a 400% FPL upper limit and higher applicable percentages that reduce subsidy generosity — would return unless Congress acts again (Congress.gov; Thomson Reuters) ^{[4] [7]}. Nonpartisan and policy organizations warned of significant premium increases for some groups when the enhancements lapse, and interest groups and analysts disagree about the distributional effects: some older enrollees above 400% FPL face larger premium impacts than younger people, according to the American Action Forum analysis cited in contemporary reporting ^[8].

5. Gaps, oversight risks, and the political context

The record shows policymakers deliberately made the change temporary as part of pandemic relief and then politically extended it through 2025 rather than codify permanence; that status leaves eligibility subject to future budget battles and political priorities and requires close attention from consumers and advisers because reconciliation, filing, and advance payment rules remain binding (IRS; CMS; Thomson Reuters) ^{[1] [5] [7]}. Sources reviewed do not assert that permanence was achieved; they uniformly characterize the expansion as temporary and extended, not made permanent ^{[4] [5]}.