H.R. 6316: Tax Credit Extension Act

This bill, known as the Tax Credit Extension Act, proposes several modifications to the Internal Revenue Code related to health insurance premium tax credits. Its key provisions include:

Extension of Premium Tax Credits

The bill extends the availability of the increased premium tax credits for health insurance coverage from the current expiration date of January 1, 2026, to January 1, 2028. This means that individuals can continue to benefit from these tax credits for an additional two years.

Household Income Ceiling Adjustments

The legislation raises the household income cap for eligibility for premium tax credits from the current level to **up to 700%** of the federal poverty level. This change allows a larger group of individuals and families to qualify for premium assistance.

Advance Payments of Premium Tax Credits

The bill allows for advance payments of premium tax credits to be made directly to individuals, particularly those who choose to enroll in certain health plans. Specifically, it enables individuals to receive these payments as follows:

• Payments can be made directly to the individual's health savings account (HSA) if they choose to designate their HSA for this purpose.
• If neither option applies, the advance payment can go directly to the individual.

New Category of Personal HSAs

The bill introduces a separate category of health savings accounts known as Personal HSAs. These accounts will:

• Receive only advance payments from the government or transfers from other Personal HSAs.
• Not allow for contributions beyond these sources.

Minimum Premium Responsibility

There will be a new requirement stating that for any month of coverage, the premium assistance will not exceed an amount determined by deducting a prescribed minimum premium responsibility amount from the monthly premium amount. This is aimed at establishing a common ground for the amount individuals must pay, thereby affecting how much assistance they can receive.

Authorization for Cost-Sharing Reduction Payments

The legislation authorizes the appropriation of necessary funds for the payment of cost-sharing reductions that help lower out-of-pocket expenses for individuals on certain health plans.

Immigration Status Considerations for Premium Tax Credits

A new provision clarifies that the determination of premium tax credit eligibility will consider an individual's immigration status. Specifically, it mandates assistance to confirm if individuals are lawfully present in the U.S. and eligible aliens, particularly affecting determinations for taxable years starting after December 31, 2026.

Sense of Congress on Immigration and Tax Credits

The bill expresses a legislative sentiment that individuals who are not legally present in the U.S. should not qualify for premium tax credits. This reinforces the need for lawful residency to access these benefits following the specified date.

Effective Dates

Most of the amendments proposed in this bill will apply to taxable years beginning after December 31, 2025, meaning the changes won't take effect until then.

Relevant Companies

• CNC: Centene Corporation may see a direct impact as a major provider of health insurance, particularly for those who could benefit from the extended tax credits, potentially increasing enrollment.
• HUM: Humana Inc. could also be affected as the changes may lead to an increase in their customer base due to the expanded eligibility for premium tax credits.
• ANTM: Anthem, Inc. could experience changes in their subscription rates and insurance plans, as more individuals may seek affordable coverage options under this legislation.