IRS updates guidance on Obamacare health insurance marketplace tax credits

The Internal Revenue Service updated its frequently asked questions page on the Premium Tax Credit used for buying health insurance through the marketplaces established by the Affordable Care Act, also known as Obamacare.

Among the updates are information on the eligibility requirements, unemployment compensation for 2020 and 2021, and details on reporting, claiming and reconciling the tax credits. The IRS also added new information on employer coverage for employees and their family members.

Among the additions are Question 12, which asks, “How do I know if the coverage offered to me by an employer of someone else, such as my spouse’s or parent’s employer, is affordable for me?” and Question 13, which asks, “What if I receive an offer of coverage from multiple employers?”

The IRS responded, “If you receive offers of coverage from multiple employers, whether the coverage is offered by your employer or someone else’s employer, you are generally considered to have an offer of affordable coverage if at least one of the offers of coverage is affordable for you.”

Another newly added FAQ section, Question 14, asks, “How is the affordability of employer coverage affected if the Marketplace makes a determination that the employer coverage is unaffordable?” The IRS pointed out that there’s a safe harbor available under Section 36B of the Internal Revenue Code.

Another new FAQ, Question 22, asks, “Am I allowed a Premium Tax Credit for Marketplace coverage if my employer offers me an Individual Coverage Health Reimbursement Arrangement?”

The IRS responded, “If your employer offered you an ICHRA, you are not allowed a Premium Tax Credit for Marketplace coverage unless 1) the ICHRA is considered unaffordable and 2) you opt-out of receiving reimbursements under the ICHRA and.  Section 1.36B-2(c)(5) of the Income Tax Regulations provides rules for when an ICHRA is considered affordable.”

There are also updates to Questions 5, 7, 8, 9, 11, 15, 18, 30 and 45.

The updated FAQs that were posted Friday supersede earlier FAQs that were posted in FS 2022-13 on Feb. 24, 2022.