“Health Insurance Premium Tax Credit” (IRS REG-131491-10)

NIHB Analysis of Proposed Rule: Health InsurancePremium Tax Credit (IRS REG-131491-10)Rating area means an Exchange service area, as described in 45CFR 155.20.Under 45 CFR 155.20 (contained in the Exchange Establishment proposed rule issued byHHS), 34 “Exchange service area” is defined as –Exchange service area means the area in which the Exchange iscertified to operate, in accordance with the requirements specifiedin subpart B of this part.As such, “the rating area in which the taxpayer resides” is defined to mean the overallservice area of an Exchange in which the taxpayer resides. In States with no “subsidiaryExchanges”, there would be one Exchange serving the entire State. For States that chooseto do so, they may establish one or more subsidiary Exchanges. 35 For States that choose tojoin with other States to form regional or multistate Exchanges, a single Exchange may servemore than one State. 36Interestingly, when the IRS defined “rating area” in the Proposed Rule for purposesof establishing the benchmark plan premium for the second lowest cost silver plan in orderto calculate the premium tax credit, the IRS referenced “Exchange service areas” as definedin the Exchange Establishment proposed rule. 37 IRS chose not to reference the term “ratingarea” as defined in the same Exchanged Establishment proposed rule. The term “ratingarea” is created in the Exchange Establishment proposed rule for the purpose of prohibitingdiscriminatory premium rates. 38 To the extent that they are created, the HHS-definedrating areas would each encompass a subset of the overall Exchange service area. In ACA §1201 / § 2701(a)(2) of the Public Health Service Act (PHSA) (again as proposed by HHS in theExchange Establishment proposed rule), “rating area” is defined as –(2) RATING AREA.—(A) IN GENERAL.—Each State shall establish 1 or more rating areaswithin that State for purposes of applying the requirements of thistitle.(B) SECRETARIAL REVIEW.—The Secretary shall review the ratingareas established by each State under subparagraph (A) to ensurethe adequacy of such areas for purposes of carrying out therequirements of this title. If the Secretary determines a State’s3435363738Exchange Establishment proposed rule (CMS-9989-P), p. 41912.ACA § 1311(f)(2).ACA § 1311(f)(1).Exchange Establishment proposed rule (CMS-9989-P).ACA § 1201 / § 2701(a)(2) of the Public Health Service Act (PHSA).National Indian Health Board Page 15 of 23 October 31, 2011