Insights

On March 16, 2017, the IRS updated its online resource “Questions and Answers on the Premium Tax Credit.” The revised Question #15 specifically addresses the eligibility of a spouse and dependent for a premium tax credit. Generally, a spouse and dependent are not eligible for a premium tax credit if they are eligible to enroll in the employee’s group health plan and the coverage provided to the employee is of minimum value and affordable.A typical plan design for a group health plan is one in which the employee’s enrollment is required in order for a spouse and/or dependent to be covered. In other words, a spouse or dependent could not be enrolled independently of the employee. Under such a design, some had argued that if an employee waived coverage, the spouse and dependent should still be eligible for a premium tax credit because technically they are no longer eligible to enroll in the employer’s plan. The new guidance clarifies that if the employee is given an opportunity to enroll him/herself, spouse and dependent, then all three had an opportunity to enroll in the employer’s plan (which meets minimum value and affordability requirements) and the spouse and dependent are, therefore, not eligible for a premium tax credit.

IRS Questions and Answers on the Premium Tax Credit »