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

NIHB Analysis of Proposed Rule: Health InsurancePremium Tax Credit (IRS REG-131491-10)out the Federal Trust Responsibility. It would also be consistent with the approach taken, andthe discretion employed, under the “employee safe harbor” provision locking-in a preliminary42, 43determination of the affordability of employer-sponsored coverage.Under the Affordable Care Act, AI/ANs are not provided an exemption from therequirement to secure minimum essential coverage, as were some individuals pursuant to ACA§§ 1501(d)(2), (3) or (4). For instance, a religious conscience exemption from the requirementto secure coverage is provided under § 1501(d)(2). However, under § 1501(e)(3), AI/AN areexempt from payment of a tax penalty for not securing minimum essential coverage. For thosewho are subject to the penalty provision, payment of the penalty is to be made to the Federalgovernment through the tax filing process. 44As just stated, under § 1501(e)(3), AI/AN are exempt from payment of a penalty for notsecuring minimum essential coverage. But if they do secure coverage and miscalculate theirincome, they run the risk of a liability, or tax penalty, being assessed.In the case of AI/AN, we believe it is accurate to describe any requirement for paymentof excess advance payments by AI/ANs as a “penalty” for the following reasons –• First, it is important to remember that the Federal Trust Responsibility as articulatedby the Federal government through the ACA and other laws holds that it is theFederal government’s responsibility to provide health care to AI/AN persons. 45• Second, the demands on the direct Federal appropriation to the Indian HealthService is lessened by AI/AN securing needed health services elsewhere and/or IHSand other I/T/U providers being reimbursed from health plans covering AI/AN forhealth services provided to AI/AN. As such, any advance credit payments made bythe Federal government to an Exchange health plan on behalf of an AI/AN is as muchor more a payment on behalf of meeting the Federal government’s obligation as it isto being an obligation of the AI/AN.• Third, any penalty amount would come from the personal resources an AI/AN maybe able to access, and not from a “repayment” of excess amounts paid to anindividual AI/AN, as the original “excess payment” is to be paid to the health plan.• Fourth, the ACA clearly indicates that the excess advance payment will be leviedagainst the individual’s taxes as would any penalty under §1501 / IRC § 5000A(b)(3),42434445Proposed Rule § 1.36B-2(c)(3)(v)(2).See discussion at ―5.4 Safe Harbor for Initial Estimate of Annual Income‖ above.IRC § 5000A.Most recently in Section 102 of the Indian Health Care Improvement Act (IHCIA), as amended bySection 10221(a) of the ACA, (codified at 25 U.S.C. § 1602) (Congress declares a national Indian healthpolicy ―in fulfillment of its special trust responsibilities and legal obligations to Indians‖.)National Indian Health Board Page 19 of 23 October 31, 2011