IRS Proposes Rule to Implement H.R. 1 Premium Tax Credit Provisions

On Oct. 15, the Treasury Department and the Internal Revenue Service (IRS) published a proposed rule to implement the premium tax credit (PTC) provisions in H.R. 1. The rule revises regulations governing eligibility for PTCs, the calculation of the credit, and taxpayer liability for excess advanced PTC payments.

The departments would narrow the definition of a qualified health plan, making plans ineligible for PTCs if they lack a pre-enrollment verification process or are selected during a special enrollment period triggered by a change in income.

The rule also would allow individuals who are determined ineligible for Medicaid solely for failing to meet community engagement requirements to enroll in marketplace minimum essential coverage, but without PTCs. Individuals who are ineligible for Medicaid for other reasons may still qualify for PTCs.

H.R. 1 also narrowed the categories of immigrants who are eligible for federal health programs. For plan years beginning on or after Jan. 1, 2027, immigrants who are lawfully present but no longer eligible for federal health programs will not be eligible for PTCs. This also will affect the premium calculation for mixed-status families with family plans.

Comments are due Nov. 30, under a shortened comment period, and a public hearing is scheduled for Dec. 8.

Contact Director of Policy Robert Nelb, MPH at [email protected] or 202.585.0127 with questions.