The U.S. federal poverty level (FPL) is a measure of income used by the Department of Health and Human Services to determine who is eligible for government programs, benefits, and subsidies. It is the minimum amount of annual income that a family needs to pay for living essentials. New guidelines are issued every January and are determined by income and household size.
Federal Poverty Level and Reduced-Cost Health Coverage Eligibility
Families across the U.S. will have varying incomes and, therefore, varying percentages of the FPL. Depending on your household income, you can qualify for different financial assistance programs to help pay for your health coverage.
If your income is:
Between 138% and 400% FPL: You will qualify for premium tax credits that reduce your premium payment cost on a Marketplace health insurance plan.
Between 100% and 138% FPL: You will likely qualify for Medicaid if your state has expanded Medicaid coverage. If not, you will fall into something called “the Medicaid expansion gap”, where you will neither qualify for a subsidy for a Marketplace plan, nor will you qualify for Medicaid in your state. Many people in this gap either have to go without insurance (because they can’t afford the plan they need), or will have to search for non-qualifying health plans outside of the Marketplace.
Below 100% FPL: You are unlikely to qualify for savings on a Marketplace health insurance plan or income-based Medicaid if your state has not expanded Medicaid coverage. But you may qualify for Medicaid if you meet certain requirements (which vary from state to state).
Federal Poverty Level For 2020 Guidelines Chart
The following chart lists the most recent federal poverty guidelines issued in January 2020. Because the costs of living in Alaska and Hawaii are higher, both states have their own respective guidelines.
48 States + D.C. (Annual)
Charts for Alaska and Hawaii are available on the U.S. Department of Human and Health Services website.
Which Government Programs Utilize Poverty Guidelines?
Government agencies compare pre-tax or after-tax income to federal poverty guidelines to determine eligibility for plans and programs. Many programs utilize a percentage multiple of the FPL to set eligibility criteria and income limits for families in need of financial assistance. Each program determines assistance eligibility on their own accord.
Supplemental Nutrition Assistance Program
The Supplemental Nutrition Assistance Program (SNAP) issues a monthly stipend to low-income families to purchase food and groceries. Federal eligibility for SNAP is limited to families with gross income up to 130% of the federal poverty line. For example, a family of four would need to make an annual income of less than $34,060 to qualify. Assets are also considered when determining eligibility. A household must have less than $3,500 in total assets if an elderly or disabled person lives there, or less than $2,250 if not.
Medicaid provides health coverage for low-income families and children, pregnant women, senior citizens, and people with disabilities. To determine financial eligibility for Medicaid, state programs will look at a household’s Modified Adjusted Gross Income (MAGI). MAGI is used to determine eligibility for Medicaid, premium tax credits, and cost-sharing reductions on Marketplace health plans. Rules for eligibility differ across states can be found directly on the HealthCare.gov website.
Low-Income Home Energy Assistance Program
The Low-Income Home Energy Assistance Program (LIHEAP) assists families with expenses related to energy in the home, including heating and cooling bills, energy crises, and weatherization home repairs. In order to qualify, families must demonstrate a need for financial assistance through their pre-tax annual income amount. A family of four would have to make under $38,325 to qualify for cost assistance. It’s possible that households already participating in other federal benefit programs such as SNAP or TANF will automatically qualify. Find out if you may qualify here.
National School Lunch Program
The National School Lunch Program (NSLP) provides low-cost or no-cost school lunches to children from low-income families. It is implemented in public and private schools across the country to ensure children have access to nutritious meals each day. Children in households with annual incomes below 130% of the FPL qualify for free meals, and those with annual incomes between 130% and 185% of the FPL qualify for price-reduced meals. Those receiving SNAP or TANF benefits automatically qualify.
Children’s Health Insurance Program
The Children’s Health Insurance Program (CHIP) provides low-cost health insurance for children in families that do not qualify for Medicaid. This program is suitable for families with children that make too much money for Medicaid, but not enough money for a private health insurance plan. Similar to Medicaid, a household’s MAGI is a primary factor in determining eligibility. Each state has its individual rules for who can qualify for CHIP. Find out if you may qualify here.
What Federal Programs Don’t Use Federal Poverty Guidelines?
There are many federal programs that are not dictated by the FPL when it comes to eligibility. The following programs use their own income limits and eligibility rules to determine whether or not an applicant can receive benefits.
Earned Income Tax Credit
An Earned Income Tax Credit (EITC) is a refundable tax credit for low to moderate-income households. To be eligible for the EITC, you must have earned income that is less than the limit for your MAGI. Limits depend on your filing status – whether you’re filing jointly, single, or as head of household – and the number of qualified children in your household, if any. Limits for the current year can be found here.
Supplemental Security Income
Supplemental Security Income (SSI) is a federal income supplement program that provides financial assistance to the elderly, blind, and disabled with limited income and resources. It directly provides cash for basic needs, such as shelter, food, and clothing. To qualify for SSI benefits, an individual’s income must be below the federal benefit rate (FBR). The FBR represents the SSI income limit as well as the maximum SSI monthly payment. In 2020, the FBR is $783 a month for individuals and $1,175 for couples.
Temporary Assistance For Needy Families
The Temporary Assistance for Needy Families (TANF) program is a federally-funded program that distributes funds to various states in order to administer local assistance programs. TANF is time-limited and encourages financial independence by requiring recipients to participate in work-related activities before receiving benefits, some of which include being employed in some capacity or actively working towards employment. Because state programs vary, eligibility rules differ across all programs. Each state has its own way of defining “needy,” and eligibility is determined based on the documentation you provide to your specific program.