Advance determination and payment of premium tax credits and cost-sharing reductions

42 U.S.C. § 18082

• Title: 42 — The Public Health and Welfare
• Chapter: SUBCHAPTER IV—AFFORDABLE COVERAGE CHOICES FOR ALL AMERICANS
• Part: B

Text

(a) In general
The Secretary, in consultation with the Secretary of the Treasury, shall establish a program under which—
(1) upon request of an Exchange, advance determinations are made under section 18081 of this title with respect to the income eligibility of individuals enrolling in a qualified health plan in the individual market through the Exchange for the premium tax credit allowable under section 36B of title 26 and the cost-sharing reductions under section 18071 of this title;
(2) the Secretary notifies—
(A) the Exchange and the Secretary of the Treasury of the advance determinations; and
(B) the Secretary of the Treasury of the name and employer identification number of each employer with respect to whom 1 or more employee 1 of the employer were determined to be eligible for the premium tax credit under section 36B of title 26 and the cost-sharing reductions under section 18071 of this title because—
(i) the employer did not provide minimum essential coverage; or
(ii) the employer provided such minimum essential coverage but it was determined under section 36B(c)(2)(C) of title 26 to either be unaffordable to the employee or not provide the required minimum actuarial value; and
(3) the Secretary of the Treasury makes advance payments of such credit or reductions to the issuers of the qualified health plans in order to reduce the premiums payable by individuals eligible for such credit.
(b) Advance determinations
The Secretary shall provide under the program established under subsection (a) that advance determination of eligibility with respect to any individual shall be made—
(A) during the annual open enrollment period applicable to the individual (or such other enrollment period as may be specified by the Secretary); and
(B) on the basis of the individual's household income for the most recent taxable year for which the Secretary, after consultation with the Secretary of the Treasury, determines information is available.
The Secretary shall provide procedures for making advance determinations on the basis of information other than that described in paragraph (1)(B) in cases where information included with an application form demonstrates substantial changes in income, changes in family size or other household circumstances, change in filing status, the filing of an application for unemployment benefits, or other significant changes affecting eligibility, including—
(A) allowing an individual claiming a decrease of 20 percent or more in income, or filing an application for unemployment benefits, to have eligibility for the credit determined on the basis of household income for a later period or on the basis of the individual's estimate of such income for the taxable year; and
(B) the determination of household income in cases where the taxpayer was not required to file a return of tax imposed by this chapter for the second preceding taxable year.
(c) Payment of premium tax credits and cost-sharing reductions
The Secretary shall notify the Secretary of the Treasury and the Exchange through which the individual is enrolling of the advance determination under section 18081 of this title.
The Secretary of the Treasury shall make the advance payment under this section of any premium tax credit allowed under section 36B of title 26 to the issuer of a qualified health plan on a monthly basis (or such other periodic basis as the Secretary may provide).
An issuer of a qualified health plan receiving an advance payment with respect to an individual enrolled in the plan shall—
(i) reduce the premium charged the insured for any period by the amount of the advance payment for the period;
(ii) notify the Exchange and the Secretary of such reduction;
(iii) include with each billing statement the amount by which the premium for the plan has been reduced by reason of the advance payment; and
(iv) in the case of any nonpayment of premiums by the insured—
(I) notify the Secretary of such nonpayment; and
(II) allow a 3-month grace period for nonpayment of premiums before discontinuing coverage.
The Secretary shall also notify the Secretary of the Treasury and the Exchange under paragraph (1) if an advance payment of the cost-sharing reductions under section 18071 of this title is to be made to the issuer of any qualified health plan with respect to any individual enrolled in the plan. The Secretary of the Treasury shall make such advance payment at such time and in such amount as the Secretary specifies in the notice.
(d) No Federal payments for individuals not lawfully present
Nothing in this subtitle or the amendments made by this subtitle allows Federal payments, credits, or cost-sharing reductions for individuals who are not lawfully present in the United States.
(e) State flexibility
Nothing in this subtitle or the amendments made by this subtitle shall be construed to prohibit a State from making payments to or on behalf of an individual for coverage under a qualified health plan offered through an Exchange that are in addition to any credits or cost-sharing reductions allowable to the individual under this subtitle and such amendments.

History

(Pub. L. 111–148, title I, §1412, Mar. 23, 2010, 124 Stat. 231; Pub. L. 119–21, title VII, §71301(c)(2), July 4, 2025, 139 Stat. 322.)

Editorial Notes

Amendment of Subsection (d)
Pub. L. 119–21, title VII, §71301(c)(2), (3), July 4, 2025, 139 Stat. 322, provided that, applicable with respect to plan years beginning on or after Jan. 1, 2027, subsection (d) of this section is amended by inserting before the period at the end ", or credits under section 36B of title 26 for aliens who are not eligible aliens (within the meaning of section 36B(e)(2) of title 26)". See 2025 Amendment note below.

Editorial Notes

References in Text
This subtitle, referred to in subsecs. (d) and (e), is subtitle E (§§1401–1421) of title I of Pub. L. 111–148, which enacted this subchapter and sections 36B and 45R of Title 26, Internal Revenue Code, amended section 405 of this title, sections 38, 196, 280C, 6103, and 7213 of Title 26, and section 1324 of Title 31, Money and Finance, and enacted provisions set out as notes under sections 36B and 38 of Title 26. For complete classification of subtitle E to the Code, see Tables.

Amendments
2025—Subsec. (d). Pub. L. 119–21 inserted ", or credits under section 36B of title 26 for aliens who are not eligible aliens (within the meaning of section 36B(e)(2) of title 26)" before period at end.

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment
Amendment by Pub. L. 119–21 applicable with respect to plan years beginning on or after Jan. 1, 2027, see section 71301(c)(3) of Pub. L. 119–21, set out as a note under section 18081 of this title.