As noted in a previous Implementation Brief , the Affordable Care Act (ACA) allows for premium assistance through tax credits for the purchase of family coverage from qualified health plans sold through health insurance marketplaces. To be eligible for tax credits, individuals must not otherwise be “eligible for minimum essential coverage” and must have annual incomes of 100-400 percent of federal poverty level. With regard to individuals who are offered employer-sponsored coverage, the law states that in order to qualify for the premium tax subsidy, the employer-sponsored coverage must be deemed unaffordable, defined by the IRS as an employee contribution requirement for self-only coverage that exceeds 9.5 percent of household income. Although the ACA extends eligibility for assistance (based on the affordability test) to workers’ dependents, the remaining question, as noted in another earlier Brief, was whether uninsured family members of employees with access to affordable self-only employer coverage can qualify for a premium tax credit. The IRS answered that question...

This Implementation Brief on premium tax credits examines the question of how the Affordable Care Act (ACA or the Act) addresses the problem that arises when low- and moderate-income employees have affordable “self-only” employer coverage, but face prohibitively high costs for family coverage, well beyond levels considered “affordable” under the Act. Coverage for a full family is extremely expensive: according to the Kaiser Family Foundation, the average 2012 cost of family coverage approaches $16,000, placing unsubsidized family benefits beyond the reach of all but affluent families. Kaiser further reports that while...

Previous updates have summarized final IRS regulations implementing provisions of the Affordable Care Act that provide premium tax credits to help low- and moderate-income individuals and families buy affordable health insurance through State health insurance Exchanges. The IRS regulations provide that premium assistance tax credits are available to all eligible state residents, regardless of whether their state Exchange is state-operated or federally facilitated. This Update examines a dispute that that has arisen regarding the availability of premium assistance tax credits in federally facilitated state Exchanges.

On May 18, 2012, the Department of Treasury (Treasury) issued final regulations on the health insurance premium tax credits enacted by the Patient Protection and Affordable Care Act (ACA). The final regulations, which took effect May 23, 2012, contain amendments to the Income Tax Regulations (26 CFR part 1) and address several issues noted in the proposed regulations (NPRM) issued by the Treasury on August 17, 2011. The refundable premium tax credits were created to help make the purchase of health insurance through the health insurance Exchanges more affordable for low- to middle-income individuals ineligible for Medicaid and without affordable ...