Proposed Rule2024-20758
Definition of the Term “Coverage Month” for Computing the Premium Tax Credit
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 17, 2024
Issuing agencies
Treasury DepartmentInternal Revenue Service
Abstract
This document contains proposed regulations that would amend the definition of "coverage month" and amend certain other rules in existing income tax regulations regarding the computation of an individual taxpayer's premium tax credit (PTC). The proposed coverage month amendment generally would provide that, in computing a PTC, a month may be a coverage month for an individual if the amount of the premium paid, including by advance payments of the PTC (APTC), for the month for the individual's coverage is sufficient to avoid termination of the individual's coverage for that month. The proposal also would amend the existing regulations relating to the amount of enrollment premiums used in computing the taxpayer's monthly PTC if a portion of the monthly enrollment premium for a coverage month is unpaid. Finally, the proposed regulations would clarify when an individual is considered to be ineligible for coverage under a State's Basic Health Program (BHP). The proposed regulations would affect taxpayers who enroll themselves, or enroll a family member, in individual health insurance coverage through a Health Insurance Exchange (Exchange) and may be allowed a PTC for the coverage. This document also provides a notice of a public hearing on these proposed regulations.
Full Text
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<title>Federal Register, Volume 89 Issue 180 (Tuesday, September 17, 2024)</title>
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[Federal Register Volume 89, Number 180 (Tuesday, September 17, 2024)]
[Proposed Rules]
[Pages 75984-75990]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-20758]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-116787-23]
RIN 1545-BR31
Definition of the Term ``Coverage Month'' for Computing the
Premium Tax Credit
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and public hearing.
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SUMMARY: This document contains proposed regulations that would amend
the definition of ``coverage month'' and amend certain other rules in
existing income tax regulations regarding the computation of an
individual taxpayer's premium tax credit (PTC). The proposed coverage
month amendment generally would provide that, in computing a PTC, a
month may be a coverage month for an individual if the amount of the
premium paid, including by advance payments of the PTC (APTC), for the
month for the individual's coverage is sufficient to avoid termination
of the individual's coverage for that month. The proposal also would
amend the existing regulations relating to the amount of enrollment
premiums used in computing the taxpayer's monthly PTC if a portion of
the monthly enrollment premium for a coverage month is unpaid. Finally,
the proposed regulations would clarify when an individual is considered
to be ineligible for coverage under a State's Basic Health Program
(BHP). The proposed regulations would affect taxpayers who enroll
themselves, or enroll a family member, in individual health insurance
coverage through a Health Insurance Exchange (Exchange) and may be
allowed a PTC for the coverage. This document also provides a notice of
a public hearing on these proposed regulations.
[[Page 75985]]
DATES: Electronic or written comments must be received by November 1,
2024. A public hearing on this proposed regulation has been scheduled
for December 13, 2024, at 10:00 a.m. ET. Requests to speak and outlines
of topics to be discussed at the public hearing must be received by
November 1, 2024. If no outlines are received by November 1, 2024, the
public hearing will be cancelled.
ADDRESSES: Commenters are strongly encouraged to submit public comments
electronically. Submit electronic submissions via the Federal
eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> (indicate IRS and
REG-116787-23) by following the online instructions for submitting
comments. Once submitted to the Federal eRulemaking Portal, comments
cannot be edited or withdrawn. The Department of the Treasury (Treasury
Department) and the IRS will publish for public availability any
comments to the IRS's public docket. Send paper submissions to:
CC:PA:01:PR (REG-116787-23), Room 5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station, Washington, DC 20044.
FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations,
Clara Raymond at (202) 317-4718; concerning submission of comments or
outlines, or requests for a public hearing, Vivian Hayes at (202) 317-
6901 (not toll-free numbers) or <a href="/cdn-cgi/l/email-protection#ccbcb9aea0a5afa4a9adbea5a2abbf8ca5bebfe2aba3ba"><span class="__cf_email__" data-cfemail="14646176787d777c7175667d7a7367547d66673a737b62">[email protected]</span></a> (preferred).
SUPPLEMENTARY INFORMATION:
Authority
This document contains proposed amendments to the Income Tax
Regulations (26 CFR part 1) under section 36B of the Internal Revenue
Code (Code). Section 36B(h) provides an express delegation of authority
for the Secretary of the Treasury or her delegate to prescribe
regulations as may be necessary to carry out section 36B, including
regulations that provide for the coordination of the credit allowed
under 36B with the program for advance payment of the credit under
section 1412 of the Affordable Care Act.\1\ The proposed regulations
are also issued under the express delegation of authority under section
7805 of the Code.
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\1\ The Affordable Care Act (or ACA) refers to the Patient
Protection and Affordable Care Act (Pub. L. 111-148, enacted on
March 23, 2010), as amended by the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111-152, enacted on March 30,
2010).
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Background
I. Definition of ``Coverage Month'' and Computation of PTC
Section 36B provides a PTC for applicable taxpayers who meet
certain eligibility requirements, including that a member of the
taxpayer's family enrolls in a qualified health plan (QHP) through an
Exchange for one or more ``coverage months.''
Section 1.36B-3(c)(1) provides that a month is a coverage month for
an individual if (i) as of the first day of the month, the individual
is enrolled in a QHP through an Exchange; (ii) the taxpayer pays the
taxpayer's share of the premium for the individual's coverage under the
plan for the month by the unextended due date for filing the taxpayer's
income tax return for that taxable year, or the full premium for the
month is paid by APTC; and (iii) the individual is not eligible for the
full calendar month for minimum essential coverage (within the meaning
of Sec. 1.36B-2(c)) other than coverage described in section
5000A(f)(1)(C) of the Code (relating to coverage in the individual
market).
Section 1.36B-3(d)(1) provides that the PTC (also called the
premium assistance amount) for a coverage month is the lesser of (i)
the premiums for the month, reduced by any amounts that were refunded,
for one or more QHPs in which a taxpayer or a member of the taxpayer's
family enrolls (enrollment premiums); or (ii) the excess of the
adjusted monthly premium for the applicable benchmark plan over \1/12\
of the product of a taxpayer's household income and the applicable
percentage for the taxable year. Family is defined in Sec. 1.36B-1(d),
and the applicable percentage is defined in Sec. 1.36B-3(g).
Section 36B(f)(3) and Sec. 1.36B-5 require Exchanges to report to
QHP enrollees and the IRS certain information, including monthly
enrollment premiums, needed to compute the PTC allowed for the
enrollee. This information is reported to enrollees on IRS Form 1095-A,
Health Insurance Marketplace Statement. The Centers for Medicare &
Medicaid Services (CMS), part of the Department of Health and Human
Services (HHS), is responsible for the Form 1095-A reporting for
Exchanges that use the Federal eligibility and enrollment platform
(Federally-facilitated Exchanges, or FFEs, and State-based Exchanges on
the Federal platform, or SBE-FPs). State Exchanges with their own
platforms (State Exchanges) are responsible for the Form 1095-A
reporting for individuals who enroll in their State Exchange.
HHS regulations at 45 CFR 156.270(d) implement section
1412(c)(2)(B)(iv)(II) of the Affordable Care Act to require issuers of
QHPs to allow a ``grace period'' for enrollees for whom APTC is paid
but who fail to timely pay their share of the premium for the coverage.
In general, a QHP issuer must provide a grace period of 3 consecutive
months for such an enrollee before the issuer may terminate the
enrollee's coverage. During the first month of the grace period, the
QHP issuer must pay all appropriate claims for services rendered, and,
during the second and third months of the grace period, the QHP issuer
may pend claims.
HHS regulations at 45 CFR 155.400(g) allow issuers to implement a
premium payment threshold policy under which issuers can consider
enrollees to have paid all amounts due if the enrollees pay an amount
sufficient to maintain a percentage of total premium paid out of the
total premium owed equal to or greater than a level prescribed by the
issuer, provided that the level and the policy are applied in a uniform
manner to all enrollees. If an enrollee satisfies these conditions, the
issuer may provide coverage even though the full enrollment premium is
not paid.
In certain States, issuers also may provide coverage without
payment of the full enrollment premium if a State department of
insurance prohibits an issuer from terminating QHP coverage during a
declared emergency.
For a month for which a taxpayer's share of the enrollment premium
is not paid in full, the current instructions for Form 1095-A require
Exchanges to report $0 on Form 1095-A as the enrollment premium for
that month, which signals to the taxpayer and the IRS that no PTC is
allowed for that month (non-payment month) because a month in which the
premium is not paid in full is not a coverage month. Thus, if an
individual is enrolled in a QHP with APTC for a month but does not pay
the full amount of the monthly premium as permitted under 45 CFR
156.270(d), 45 CFR 155.400(g), or applicable State law, $0 should be
reported as the enrollment premium for the month, and a PTC is not
allowed for that month for the coverage.
CMS has informed the Treasury Department and the IRS that, because
CMS is not the entity that collects premium payments from an enrollee,
implementing the section 36B definition of coverage month is
challenging for CMS in situations in which the taxpayer's share of the
premium is not paid in full but the taxpayer (or the taxpayer's
enrollee) nevertheless may remain enrolled in a QHP with APTC,
[[Page 75986]]
if applicable, under 45 CFR 156.270(d), 45 CFR 155.400(g), or
applicable State law. An audit by the HHS Office of Inspector General
\2\ found that CMS currently reports to FFE and SBE-FP enrollees and
the IRS on Form 1095-A the full enrollment premium for the first month
of a grace period, notwithstanding that the taxpayer's share of the
full premium for that month may never have been paid. Similarly, CMS
currently reports to FFE and SBE-FP enrollees and the IRS on Form 1095-
A the full enrollment premium (1) for months for which an issuer
provides coverage to enrollees who satisfy the premium payment
threshold, and (2) for months for which an issuer has been ordered by a
State department of insurance, during a declared emergency, not to
terminate an enrollee's coverage for the month even though the full
premium has not been paid. Consequently, for these two scenarios as
well as the grace period scenario, FFEs and SBE-FPs treat a month as a
coverage month for which APTC is allowed, and the IRS would not have
information to disallow a PTC for the month because the full enrollment
premium is reported for the month.
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\2\ CMS AUTHORIZED HUNDREDS OF MILLIONS OF DOLLARS IN ADVANCED
PREMIUM TAX CREDITS ON BEHALF OF ENROLLEES WHO DID NOT MAKE THEIR
REQUIRED PREMIUM PAYMENTS (A-02-19-02005), OIG, March 2021, accessed
at <a href="https://oig.hhs.gov/oas/reports/region2/21902005.pdf">https://oig.hhs.gov/oas/reports/region2/21902005.pdf</a>.
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In contrast, some State Exchanges have been reporting $0 as the
enrollment premium for the first month of a grace period and for
certain other months for which coverage was provided without the
taxpayer's share of the full premium being paid. Consequently,
taxpayers in these State Exchanges generally are unable to claim a PTC
for those months.
II. Determination of Ineligibility for a State's BHP
As noted in section I of this Background, Sec. 1.36B-3(c)(1)
provides that a month is a coverage month for an individual only if,
among other requirements, the individual is not eligible for the full
calendar month for minimum essential coverage (within the meaning of
Sec. 1.36B-2(c)) other than coverage described in section
5000A(f)(1)(C) of the Code (relating to coverage in the individual
market). Under section 5000A(f)(1)(A) and Sec. 1.5000A-2, the term
``minimum essential coverage'' includes coverage under government-
sponsored programs such as Medicaid, Children's Health Insurance
Program (CHIP), and a State's BHP.\3\
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\3\ Under the authority in section 5000A(f)(1)(A) and Sec.
1.5000A-2(f)(1)(E), coverage through a BHP standard health plan has
been recognized as minimum essential coverage. See 42 CFR 600.5.
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Section 1.36B-2(c)(2)(i) provides that, for purposes of determining
whether a given month is a coverage month for an individual, an
individual generally is considered eligible for government-sponsored
minimum essential coverage if the individual meets the criteria for
coverage under a government-sponsored program described in section
5000A(f)(1)(A) as of the first day of the first full month the
individual may receive benefits under the program.
Section 1.36B-2(c)(2)(v) provides that an individual is treated as
not eligible for Medicaid, CHIP, or a similar program for a period of
coverage under a QHP if, when the individual enrolls in the QHP, an
Exchange determines or considers (within the meaning of 45 CFR
155.302(b)) the individual to be not eligible for Medicaid or CHIP.
Under 42 U.S.C. 18051 and the implementing regulations at 42 CFR
part 600, a State is allowed to establish a BHP for eligible
individuals. Section 18051(e) provides that a resident of a State
cannot be an eligible individual unless the individual is not eligible
to enroll in the State's Medicaid program under title XIX of the Social
Security Act for benefits that at a minimum consist of the essential
health benefits described in 42 U.S.C. 18022(b).
The Treasury Department and the IRS have become aware that the rule
in Sec. 1.36B-2(c)(2)(v) relating to an individual being considered
ineligible for coverage under a Medicaid, CHIP, or a similar program,
is ambiguous as it applies to a State's BHP and should be clarified.
Explanation of Provisions
I. Change to the Definition of ``Coverage Month'' and Conforming
Amendments to PTC Computation
As explained in the Background section of this preamble, a PTC
generally is allowed for a taxpayer for months that are coverage months
for the taxpayer and other individuals in the taxpayer's family.
Further, under Sec. 1.36B-3(c)(1)(ii), a month is not a coverage month
for an individual unless the taxpayer pays the taxpayer's full share of
the premium for the individual's coverage under the plan for the month
by the unextended due date for filing the taxpayer's income tax return
for that taxable year, or the full premium for the month is paid by
APTC.
Under HHS regulations at 45 CFR 156.270(d), issuers must provide
coverage to enrollees for whom APTC is paid in the first month of a
grace period, even if the enrollee's share of the premium for the
coverage is unpaid. Thus, in that situation, the amount of the total
premium paid by APTC is sufficient to allow for enrollees to remain
covered. In addition, as noted in the Background section, Exchanges are
not consistent in the manner they report enrollment premiums for the
first month of a grace period, with some reporting the full premium for
the month and others reporting $0. This inconsistent reporting may lead
to disparate treatment among taxpayers, with some being allowed to
claim a PTC for the first month of a grace period and others being
denied PTC for such a month. The Treasury Department and the IRS are of
the view that amending the coverage month rule would promote reporting
consistency and thus would achieve more consistent treatment among
taxpayers. Moreover, because HHS regulations require issuers to provide
coverage for the first month of a grace period to enrollees for whom
APTC is paid for that month, it is reasonable to provide consistent
treatment for tax purposes. Thus, the proposed regulations would treat
the first month of a grace period as a coverage month for PTC purposes
if the other coverage month requirements in Sec. 1.36B-3(c) are
satisfied. These proposed regulations are consistent with the express
delegation of authority in section 36B(h)(1) to provide regulations
that provide for coordination of the section 36B credit allowed with
the APTC program.
In addition to addressing the first month of a grace period, the
proposed regulations would address two other scenarios in which an
issuer provides coverage even though the full enrollment premium is not
paid as permitted under applicable law. In the first scenario, some
issuers provide coverage for a month as long as at least a certain
portion of the enrollee's premium for the month is paid, as permitted
under CMS's premium payment threshold policy. The Treasury Department
and the IRS are of the view that a month for which coverage is provided
because a premium payment threshold is met should not fail to be a
coverage month solely because the full premium has not been paid.
Otherwise, a taxpayer could have monthly PTC disallowed due to a
relatively small amount of unpaid premium, resulting in a tax liability
that far exceeds the amount of the unpaid premium, for a
[[Page 75987]]
month in which the amount paid for the coverage met the threshold for
the provision of coverage permitted by HHS.
The second scenario involves a State department of insurance
prohibiting an issuer from terminating QHP coverage during a declared
emergency. In this scenario, if the issuer provides coverage for a
month even though the enrollee's portion of the premium has not been
fully paid, the Treasury Department and the IRS are of the view that
the month should not fail to be a coverage month solely because the
full premium has not been paid. This month should be treated as a
coverage month because the portion, if any, of the premium that was
paid is sufficient to provide coverage to the enrollees during an
emergency situation under applicable State law.
Consequently, pursuant to the express delegations of authority in
sections 36B(h) and 7805, the proposed regulations would provide that,
under these three scenarios, a month may be a coverage month for a
taxpayer irrespective of whether the full premium for the month is paid
by the unextended due date of the taxpayer's return for the year of
coverage. The Treasury Department and the IRS request comments on
whether there are other scenarios in which an issuer does not terminate
coverage for a month for which the full premium has not been paid and
whether such a month should be treated as a coverage month.
The proposed amendment to the definition of ``coverage month'' in
Sec. 1.36B-3(c)(1) would require a conforming change to the
calculation of the monthly PTC amount under Sec. 1.36B-3(d)(1)(i),
which provides, in effect, that monthly PTC for a coverage month cannot
exceed the premiums for the month, reduced by any amounts that were
refunded in the same taxable year as the premium liability. If a month
in which a portion of the enrollment premiums is unpaid is a coverage
month, the premium used to compute the PTC for the month should not
include the unpaid portion. Otherwise, a taxpayer could receive a
monthly PTC for coverage that exceeds the amount of the premium paid
for the coverage, which would result in an undue windfall to the
taxpayer. In addition, as noted previously, existing regulations
require, in computing monthly PTC, enrollment premiums to be reduced by
amounts refunded in the year of coverage. Consistent with the existing
rule for computing monthly PTC, the premiums used for computing monthly
PTC under the proposed rule also should be reduced by unpaid amounts.
Thus, pursuant to the express delegations of authority in sections
36B(h) and 7805, the proposed regulations would provide that the
premium for a month to be considered in determining PTC for an
individual's coverage must be reduced by amounts refunded in the same
taxable year as the premium liability is incurred and by any portion of
the premium that is unpaid as of the unextended due date for filing the
taxpayer's income tax return for the taxable year that includes the
month. Taxpayers would be instructed to comply with this rule by
reducing their enrollment premiums on Form 8962, Premium Tax Credit
(PTC), for a coverage month by any amount that remains unpaid as of the
unextended due date of their return.
II. Determination of Ineligibility for Medicaid, CHIP, or a Similar
Program
As discussed in the Background section of this preamble, Sec.
1.36B-2(c)(2)(v) provides that an individual is treated as not eligible
for Medicaid, CHIP, or a similar program for a period of coverage under
a QHP if, when the individual enrolls in the QHP, an Exchange
determines or assesses the individual to be not eligible for Medicaid
or CHIP. The first part of the sentence references ``Medicaid, CHIP or
similar program,'' which includes a State's BHP. See 81 FR 91755,
91756. However, the second part of the sentence references only
Medicaid or CHIP determinations under 45 CFR 155.302(b) and says
nothing about determinations of eligibility under similar programs such
as State BHPs. The unintended consequence of this language is that an
individual who meets the criteria for coverage under a State BHP could
be considered ineligible for the BHP coverage if the Exchange
determines that the individual is ineligible for Medicaid or CHIP.
Based on the Exchange determination of ineligibility for Medicaid or
CHIP, the individual could enroll in a QHP and be allowed a PTC for the
QHP coverage.
Consequently, pursuant to the express delegations of authority in
sections 36B(h) and 7805, the proposed regulations would clarify that
an individual is treated as not eligible for Medicaid, CHIP, or a
similar program such as a State BHP, for a period of coverage under a
QHP if, when the individual enrolls in the QHP, an Exchange conducts an
eligibility determination or, if applicable, eligibility assessment
(within the meaning of 45 CFR 155.302(b)) for Medicaid, CHIP, or a
similar program and determines or assesses the individual to be not
eligible for coverage under the program. Thus, under the proposed
revision, an individual's determination of ineligibility for Medicaid
or CHIP would not affect whether the individual is treated as
ineligible for BHP coverage for purposes of determining whether a PTC
is allowed.
III. Severability
If any provision in this rulemaking is held to be invalid or
unenforceable facially, or as applied to any person or circumstance, it
shall be severable from the remainder of this rulemaking, and shall not
affect the remainder thereof, or the application of the provision to
other persons not similarly situated or to other dissimilar
circumstances.
Statement of Availability of IRS Documents
Guidance cited in this preamble is published in the Internal
Revenue Bulletin and is available from the Superintendent of Documents,
U.S. Government Publishing Office, Washington, DC 20402, or by visiting
the IRS website at <a href="https://www.irs.gov">https://www.irs.gov</a>.
Proposed Applicability Dates
The proposed regulations under Sec. Sec. 1.36B-2 and 1.36B-3 are
proposed to apply for taxable years beginning on or after the first
date of the calendar year that begins after the date these regulations
are published as final regulations in the Federal Register.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of Agreement, Review of Treasury
Regulations under Executive Order 12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject to the requirements of
section 6 of Executive Order 12866, as amended. Therefore, a regulatory
impact assessment is not required.
II. Paperwork Reduction Act
These proposed regulations do not impose any additional information
collection requirements in the form of reporting, recordkeeping
requirements, or third-party disclosure statements. Taxpayers who claim
PTC on their income tax returns are required to file Form 8962, which
is the sole collection of information requirement imposed by section
36B and the regulations under section 36B. The rules in these proposed
regulations, if finalized, would require the IRS to revise the
instructions for Form 8962. For purposes of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3507(c)), the reporting burden associated with the
collection of information for Form 8962 will be
[[Page 75988]]
reflected in the PRA submission associated with income tax returns
under the OMB control number 1545-0074. To the extent there is a change
in burden because of these proposed regulations, the change in burden
will be reflected in the updated burden estimates for Form 8962.
III. Regulatory Flexibility Act
When an agency issues a proposed rulemaking, the Regulatory
Flexibility Act (5 U.S.C. chapter 6) (RFA) requires the agency to
``prepare and make available for public comment an initial regulatory
flexibility analysis'' that ``describe[s] the impact of the proposed
rule on small entities.'' See 5 U.S.C. 603(a). The term ``small
entities'' is defined in 5 U.S.C. 601 to mean ``small business,''
``small organization,'' and ``small governmental jurisdiction,'' which
are also defined in 5 U.S.C. 601. Small business size standards define
whether a business is ``small'' and have been established for types of
economic activities, or industry, generally under the North American
Industry Classification System (NAICS). See title 13, part 121 of the
Code of Federal Regulations (Small Business Size Regulations). The size
standards look at various factors, including annual receipts, number of
employees, and amount of assets, to determine whether the business is
small. See title 13, Sec. 121.201 of the Code of Federal Regulations
for the Small Business Size Standards by NAICS Industry.
Section 605 of the RFA provides an exception to the requirement to
prepare an initial regulatory flexibility analysis if the agency
certifies that the proposed rulemaking will not have a significant
economic impact on a substantial number of small entities. The Treasury
Department and the IRS hereby certify that these proposed regulations
will not have a significant economic impact on a substantial number of
small entities. This certification is based on the fact that the
majority of the effect of the proposed regulations falls on individual
taxpayers, and entities will experience only small changes.
Pursuant to section 7805(f) of the Code, these proposed regulations
have been submitted to the Chief Counsel for the Office of Advocacy of
the Small Business Administration for comment on their impact on small
business.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that agencies assess anticipated costs and benefits and take certain
other actions before issuing a final rule that includes any Federal
mandate that may result in expenditures in any one year by a State,
local, or Tribal government, in the aggregate, or by the private
sector, of $100 million (updated annually for inflation). This proposed
rule does not include any Federal mandate that may result in
expenditures by State, local, or Tribal governments, or by the private
sector in excess of that threshold.
V. Executive Order 13132: Federalism
E.O. 13132 (Federalism) prohibits an agency from publishing any
rule that has federalism implications if the rule either imposes
substantial, direct compliance costs on State and local governments,
and is not required by statute, or preempts State law, unless the
agency meets the consultation and funding requirements of section 6 of
the E.O. This proposed rule does not have federalism implications and
does not impose substantial direct compliance costs on State and local
governments or preempt State law within the meaning of the E.O.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to comments that are submitted timely to
the IRS as prescribed in this preamble in the ADDRESSES section. The
Treasury Department and the IRS request comments on all aspects of the
proposed regulations, including the economic impact of the proposed
regulations. Any electronic comments submitted, and to the extent
practicable any paper comments submitted, will be made available at
<a href="http://www.regulations.gov">www.regulations.gov</a> or upon request.
A public hearing is being held on December 13, 2024, beginning at
10:00 a.m. ET, in the Auditorium at the Internal Revenue Service
Building, 1111 Constitution Avenue NW, Washington, DC. Due to building
security procedures, visitors must enter at the Constitution Avenue
entrance. In addition, all visitors must present photo identification
to enter the building. Because of access restrictions, visitors will
not be admitted beyond the immediate entrance area more than 30 minutes
before the hearing starts. Participants may alternatively attend the
public hearing by telephone.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who
wish to present oral comments at the hearing must submit an outline of
the topics to be discussed as well as the time to be devoted to each
topic by November 1, 2024. A period of ten minutes will be allocated to
each person for making comments. After the deadline for receiving
outlines has passed, the IRS will prepare an agenda containing the
schedule of speakers. Copies of the agenda will be made available free
of charge at the hearing. If no outlines of the topics to be discussed
at the hearing are received by November 1, 2024, the public hearing
will be cancelled. If the public hearing is cancelled, a notice of
cancellation of the public hearing will be published in the Federal
Register.
Individuals who want to testify in person at the public hearing
must send an email to <a href="/cdn-cgi/l/email-protection#2d5d584f41444e45484c5f44434a5e6d445f5e034a425b"><span class="__cf_email__" data-cfemail="6b1b1e09070208030e0a1902050c182b021918450c041d">[email protected]</span></a> to have their name added
to the building access list. The subject line of the email must contain
the regulation number REG-116787-23 and the language TESTIFY In Person.
For example, the subject line may say: Request to TESTIFY In Person at
Hearing for REG-116787-23.
Individuals who want to testify by telephone at the public hearing
must send an email to <a href="/cdn-cgi/l/email-protection#2d5d584f41444e45484c5f44434a5e6d445f5e034a425b"><span class="__cf_email__" data-cfemail="34444156585d575c5155465d5a5347745d46471a535b42">[email protected]</span></a> to receive the telephone
number and access code for the hearing. The subject line of the email
must contain the regulation number REG-116787-23 and the language
TESTIFY Telephonically. For example, the subject line may say: Request
to TESTIFY Telephonically at Hearing for REG-116787-23.
Individuals who want to attend the public hearing in person without
testifying must also send an email to <a href="/cdn-cgi/l/email-protection#4b3b3e29272228232e2a3922252c380b223938652c243d"><span class="__cf_email__" data-cfemail="6e1e1b0c02070d060b0f1c0700091d2e071c1d40090118">[email protected]</span></a> to have
their name added to the building access list. The subject line of the
email must contain the regulation number REG-116787-23 and the language
ATTEND In Person. For example, the subject line may say: Request to
ATTEND Hearing in Person for REG-116787-23. Requests to attend the
public hearing must be received by 5:00 p.m. ET on December 11, 2024.
Individuals who want to attend the public hearing telephonically
without testifying must also send an email to <a href="/cdn-cgi/l/email-protection#e8989d8a84818b808d899a81868f9ba8819a9bc68f879e"><span class="__cf_email__" data-cfemail="39494c5b55505a515c584b50575e4a79504b4a175e564f">[email protected]</span></a> to
receive the telephone number and access code for the hearing. The
subject line of the email must contain the regulation number REG-
116787-23 and the language ATTEND Hearing Telephonically. For example,
the subject line may say: Request to ATTEND Hearing Telephonically for
REG-116787-23. Requests to attend the public hearing must be received
by 5:00 p.m. ET on December 11, 2024.
Hearings will be made accessible to people with disabilities. To
request special assistance during the hearing, contact the Publications
and Regulations Branch of the Office of Associate Chief Counsel
(Procedure and Administration) by sending an email to
<a href="/cdn-cgi/l/email-protection#daaaafb8b6b3b9b2bfbba8b3b4bda99ab3a8a9f4bdb5ac"><span class="__cf_email__" data-cfemail="9cece9fef0f5fff4f9fdeef5f2fbefdcf5eeefb2fbf3ea">[email protected]</span></a> (preferred) or by
[[Page 75989]]
telephone at (202) 317-6901 (not a toll-free number) by at least
December 10, 2024.
Statement of Availability of IRS Documents
Guidance cited in this preamble is published in the Internal
Revenue Bulletin and is available from the Superintendent of Documents,
U.S. Government Publishing Office, Washington, DC 20402, or by visiting
the IRS website at <a href="https://www.irs.gov">https://www.irs.gov</a>.
Drafting Information
The principal author of these proposed regulations is Clara L.
Raymond of the Office of Associate Chief Counsel (Income Tax and
Accounting). However, other personnel from the Treasury Department and
the IRS participated in the development of the regulations.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, the Treasury Department and the IRS propose to amend
26 CFR part 1 as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 is amended by adding
entries in numerical order for Sec. Sec. 1.36B-1 through 1.36B-3, and
1.36B-6, and revising the entries for Sec. Sec. 1.36B-0, 1.36B-4, and
1.36B-5 to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
* * * * *
Section 1.36B-0 also issued under 26 U.S.C. 36B(h).
Section 1.36B-1 also issued under 26 U.S.C. 36B(h).
Section 1.36B-2 also issued under 26 U.S.C. 36B(h).
Section 1.36B-3 also issued under 26 U.S.C. 36B(h).
Section 1.36B-4 also issued under 26 U.S.C. 36B(h).
Section 1.36B-5 also issued under 26 U.S.C. 36B(h).
Section 1.36B-6 also issued under 26 U.S.C. 36B(h).
* * * * *
0
Par. 2. Section 1.36B-2 is amended by:
0
1. Revising the first sentence in paragraph (c)(2)(v);
0
2. Revising paragraph (e)(1); and
0
3. Adding paragraph (e)(6).
The revisions and addition read as follows:
Sec. 1.36B-2 Eligibility for premium tax credit.
* * * * *
(c) * * *
(2) * * *
(v) * * * An individual is treated as not eligible for Medicaid,
CHIP, or a similar program such as a Basic Health Program, for a period
of coverage under a qualified health plan if, when the individual
enrolls in the qualified health plan, an Exchange conducts an
eligibility determination or, if applicable, eligibility assessment
(within the meaning of 45 CFR 155.302(b)) for Medicaid, CHIP, or a
similar program and determines or assesses the individual to be not
eligible for coverage under the program. * * *
* * * * *
(e) * * *
(1) Except as provided in paragraphs (e)(2) through (6) of this
section, this section applies to taxable years ending after December
31, 2013.
* * * * *
(6) The first sentence of paragraph (c)(2)(v) of this section
applies to taxable years beginning on or after [insert the first date
of the calendar year that begins after the date of publication of the
final regulations in the Federal Register]. The first sentence of
paragraph (c)(2)(v) of this section, as contained in 26 CFR part I
edition revised as of April 1, 2024, applies to taxable years ending
after December 31, 2013, and beginning before [insert the first date of
the calendar year that begins after the date of publication of the
final regulations in the Federal Register].
Par. 3. Section 1.36B-3 is amended by:
0
1. Revising paragraph (c)(1)(ii);
0
2. Redesignating paragraphs (c)(4) and (c)(5) as paragraphs (c)(5) and
(c)(6), respectively, and adding new paragraph (c)(4);
0
3. Revising paragraph (d)(1)(i);
0
4. Revising paragraph (n).
The revisions and additions read as follows:
Sec. 1.36B-3 Computing the premium assistance credit amount.
* * * * *
(c) * * *
(1) * * *
(ii) The taxpayer pays the taxpayer's share of the premium for the
individual's coverage under the plan for the month by the unextended
due date for filing the taxpayer's income tax return for that taxable
year, the full premium for the month is paid by advance credit
payments, or the amount of the premium paid (including by advance
credit payments) for the month is sufficient to avoid termination of
the individual's coverage for that month under one of the scenarios
described in paragraph (c)(4) of this section; and
* * * * *
(4) Scenarios for payments sufficient to avoid coverage
termination. The scenarios under which the amount of the premium paid
(including by advance credit payments) for the month is sufficient to
avoid termination of an individual's coverage for that month under
paragraph (c)(1)(ii) of this section are the following:
(i) The first month of a grace period described in 45 CFR
156.270(d) for the individual.
(ii) A month for which a premium payment threshold under 45 CFR
155.400(g) has been met and for which month the issuer of the
individual's qualified health plan provides coverage.
(iii) A month for which a State department of insurance has, during
a declared emergency, issued an order prohibiting the issuer of the
individual's qualified health plan from terminating the individual's
coverage for the month irrespective of whether the full premium for the
month is made.
* * * * *
(d) * * *
(1) * * *
(i) The enrollment premiums, which are the premiums for the month
for one or more qualified health plans in which a taxpayer or a member
of the taxpayer's family enrolls, reduced by any amounts--
(A) Refunded in the same taxable year as the premium liability is
incurred; or
(B) Unpaid as of the unextended due date for filing the taxpayer's
income tax return for the taxable year that includes the month, or
* * * * *
(n) Applicability dates. (1) Except as provided in paragraphs
(n)(2) through (4) of this section, this section applies to taxable
years ending after December 31, 2013.
(2) Paragraphs (d)(1) (except for paragraph (d)(1)(i)) and (d)(2)
of this section apply to taxable years beginning after December 31,
2016. Paragraph (f) of this section applies to taxable years beginning
after December 31, 2018. Paragraphs (d)(1) and (d)(2) of Sec. 1.36B-3,
as contained in 26 CFR part I edition revised as of April 1, 2016,
apply to taxable years ending after December 31, 2013, and beginning
before January 1, 2017. Paragraph (f) of Sec. 1.36B-3, as contained in
26 CFR part I edition revised as of April 1, 2016, applies to taxable
years ending after December 31, 2013, and beginning before January 1,
2019.
(3) Paragraphs (c)(4) through (6) of this section apply to taxable
years
[[Page 75990]]
beginning on or after [insert the first date of the calendar year that
begins after the date of publication of final regulations in the
Federal Register]. Paragraph (c)(4) of this section, as contained in 26
CFR part I edition revised as of April 1, 2024, applies to taxable
years beginning after December 31, 2016, and beginning before [insert
the first date of the calendar year that begins after the date of
publication of the final regulations in the Federal Register].
Paragraph (c)(5) of this section, as contained in 26 CFR part I edition
revised as of April 1, 2024, applies to taxable years ending after
December 31, 2013, and beginning before [insert the first date of the
calendar year that begins after the date of publication of the final
regulations in the Federal Register].
(4) Paragraph (d)(1)(i) of this section applies to taxable years
beginning on or after [insert the first date of the calendar year that
begins after the date of publication of the final regulations in the
Federal Register]. Paragraph (d)(1)(i) of Sec. 1.36B-3, as contained
in 26 CFR part I edition revised as of April 1, 2016, applies to
taxable years ending after December 31, 2013, and beginning before
January 1, 2017. Paragraph (d)(1)(i) of Sec. 1.36B-3, as contained in
26 CFR part I edition revised as of April 1, 2022, applies to taxable
years beginning after December 31, 2016, and beginning before January
1, 2023. Paragraph (d)(1)(i) of Sec. 1.36B-3, as contained in 26 CFR
part I edition revised as of April 1, 2024, applies to taxable years
beginning after December 31, 2022, and beginning before [insert the
first date of the calendar year that begins after the date of
publication of the final regulations in the Federal Register].
Douglas W. O'Donnell,
Deputy Commissioner.
[FR Doc. 2024-20758 Filed 9-16-24; 8:45 am]
BILLING CODE 4830-01-P
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