The federal government has released a final rule cementing many of the details of the health insurance premium tax credit. Mandated by the healthcare reform law, the credit applies to individuals and families who are enrolled in insurance exchanges and whose income is between 100% and 400% of the federal poverty level.
The Treasury Department, which published the rule May 18 (PDF), estimates the tax credit will help provide coverage for nearly 20 million middle-income Americans.
The rule provided clarification of some of the provisions initially outlined in the August 2011 proposed rule, including the types of exchanges that taxpayers must participate in to be eligible for the credit, and rules regarding termination from the program.
But the Treasury Department declined to provide further details about how it will gauge the affordability of employer-sponsored insurance. According to the rule, individuals are eligible for the credit if their employer-sponsored coverage would cost them more than 9.5% of their household income in self-only premiums. Despite questions about how family coverage—versus self-only—would affect affordability, the department shelved the issue for later rulemaking.
“Future regulations concerning employer-sponsored coverage will provide final rules on determining affordability for related individuals and proposed rules on determining minimum value,” according to the final rule.
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