← Back to News & Updates
Final Rule Related to Premium Tax Credit Eligibility
Dec 23, 2016
December 20, 2016
Premium Tax Credit Eligibility Impacts Employer 'Pay or Play' Liability
The IRS has released a final rule clarifying certain issues regarding the premium tax credit (PTC) for individuals who are not offered an annual opportunity to enroll in employer-sponsored coverage or provide inaccurate information to a Health Insurance Marketplace in order to become eligible for a PTC.
How PTCs Impact Employers
For 2016, applicable large employers (ALEs)—generally those with at least 50 full-time employees, including full-time equivalent employees (FTEs), in the preceding calendar year—will generally be liable for an employer shared responsibility payment ("pay or play" penalty) only if:
- The ALE does not offer minimum essential coverage to at least 95% of its full-time employees and their dependents, and at least one full-time employee receives a PTC; or
- The ALE offers minimum essential coverage to at least 95% of its full-time employees and their dependents, but at least one full-time employee receives a PTC (either because the employer did not offer coverage to that employee or because the coverage the employer offered to that employee was unaffordable to the employee or did not provide minimum value).
New PTC Eligibility Regulations
Among other things, the final rule clarifies the following:
- Individuals who decline to enroll in affordable, minimum value employer-sponsored coverage for a plan year (and thus are ineligible for a PTC that year), but are not provided the opportunity to enroll in that coverage for any succeeding plan year, will not be denied eligibility for a PTC for the succeeding plan year(s) for which there is no enrollment opportunity; and
- Certain safe harbors regarding eligibility will not apply to individuals who, intentionally or with reckless disregard for the facts, provide inaccurate information to a Health Insurance Marketplace.
The final rule is generally applicable for taxable years beginning after December 31, 2016. Click here to read the final rule in its entirety.
For more information in eligibility, visit Premium Tax Credit for Individuals.
For questions, please contact a member of your b&p Sales Team - 888.722.3373.