Premium Tax Credit Eligibility

[peggysioux]

Taxpayer received advanced payments of premium tax credit for 2021 (and has for several years). Taxpayer stated she provided all information to the Marketplace stating that she told Marketplace representative that she was eligible for health insurance through employer that met MIC when she first enrolled in Covered CA. She is not asked, nor does she provide, the cost of the employer-provided insurance to the Marketplace each year. The instructions state: If taxpayer provided accurate information about his employer’s coverage to Marketplace, and the Marketplace determined that the offer of coverage was not affordable, taxpayer is eligible for APTC.

The Marketplace determined she was eligible for APTC several years ago and just renews every year without determining affordability based on cost of employer-provided coverage.

So my question is this: Is she eligible for the Premium Tax Credit? Do I mark that she is ineligible for PTC being employer-provided coverage is below 9.83% of income or being the Marketplace “determined” her eligible, she is not liable for payback of the APTC?

Input is very much appreciated.

Peggy Sioux

[TaxGuyBill]

No, she is not eligible.

That part of the Instructions that you cited is based off of Regulation ?1.36B-2.

(3) Employee safe harbor. An eligible employer-sponsored plan is not affordable for an employee or a related individual for a plan year if, when the employee or a related individual enrolls in a qualified health plan for a period coinciding with the plan year (in whole or in part), an Exchange determines that the eligible employer-sponsored plan is not affordable for that plan year.

This paragraph (c)(3)(v)(A)(3) does not apply to a determination made as part of the redetermination process described in 45 CFR 155.335 unless the individual receiving an Exchange redetermination notification affirmatively responds and provides current information about affordability.

https://www.law.cornell.edu/cfr/text/26/1.36B-2

The first year, it doesn't really seem like the Exchange determined it was not affordable. They would have needed to ask the costs in order to make that decision. It seems like the person just ignored that and just gave her the Advance credit.

Even if that first year was okay, that rule ONLY applies to the first year. It specifically says that rule does NOT apply to the annual "redetermination" process.

[peggysioux]

Thank you so much for the response and the reg relating to the answer to my question.

Peggy Sioux