75984 Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 

PART 1308—SCHEDULES OF 

CONTROLLED SUBSTANCES 

■ 1. The authority citation for part 1308 

continues to read as follows: 

Authority: 21 U.S.C. 811, 812, 871(b), 

956(b), unless otherwise noted. 

■ 2. In § 1308.11, add paragraphs (h)(70) 

and (71) to read as follows: 

§ 1308.11 Schedule I 

* * * * * 

(h) * * * 

*******

(70) 2-(4-methoxybenzyl)-5-nitro-1-(2-(pyrrolidin-1-yl)ethyl)-1H-benzimidazole, its isomers, esters, ethers, salts, and salts of isomers, 

esters and ethers (Other names: N-pyrrolidino metonitazene; metonitazepyne) ........................................................................................ 9762 

(71) 5-nitro-2-(4-propoxybenzyl)-1-(2-(pyrrolidin-1-yl)ethyl)-1H-benzimidazole, its isomers, esters, ethers, salts, and salts of isomers, 

esters and ethers (Other names: N-pyrrolidino protonitazene; protonitazepyne) ....................................................................................... 9763 

Signing Authority 

This document of the Drug 

Enforcement Administration was signed 

on September 11, 2024, by 

Administrator Anne Milgram. That 

document with the original signature 

and date is maintained by DEA. For 

administrative purposes only, and in 

compliance with requirements of the 

Office of the Federal Register, the 

undersigned DEA Federal Register 

Liaison Officer has been authorized to 

sign and submit the document in 

electronic format for publication, as an 

official document of DEA. This 

administrative process in no way alters 

the legal effect of this document upon 

publication in the Federal Register. 

Heather Achbach, 

Federal Register Liaison Officer, Drug 

Enforcement Administration. 

[FR Doc. 2024–21058 Filed 9–16–24; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–102161–23] 

RIN 1545–BQ89 

Identification of Basket Contract 

Transactions as Listed Transactions; 

Hearing Cancellation 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Cancellation of a notice of 

public hearing on a proposed 

rulemaking and notice of public 

hearing. 

SUMMARY: This document cancels a 

public hearing on proposed regulations 

that would identify transactions that are 

the same as, or substantially similar to, 

certain basket contract transactions as 

listed transactions, a type of reportable 

transaction. 

DATES: The public hearing scheduled for 

September 26, 2024, at 10 a.m. ET is 

cancelled. 

ADDRESSES: Public comments submitted 

for the proposed rule can be viewed 

electronically via the Federal 

eRulemaking Portal at https://

www.regulations.gov by searching REG– 

102161–23. The public hearing 

scheduled to be held in the Auditorium 

at the Internal Revenue Building, 1111 

Constitution Avenue NW, Washington, 

DC is cancelled. 

FOR FURTHER INFORMATION CONTACT: 

Oluwafunmilayo Taylor, Section Chief, 

the Publications and Regulations 

Section at (202) 317–6901 (not a toll-free 

number). 

SUPPLEMENTARY INFORMATION: A notice 

of proposed rulemaking and a notice of 

public hearing that appeared in the 

Federal Register on July 12, 2024 (89 FR 

57111), announced that a public hearing 

being held in person and by 

teleconference was scheduled for 

September 26, 2024, at 10 a.m. ET. The 

subject of the public hearing is under 26 

CFR part 1. 

The public comment period for these 

regulations expired on September 10, 

2024. The notice of proposed 

rulemaking and notice of public hearing 

instructed those interested in testifying 

at the public hearing to submit a request 

to testify and an outline of the topics to 

be addressed. We did not receive a 

request to testify at the Public Hearing. 

Therefore, the public hearing scheduled 

for September 26, 2024, at 10 a.m. ET 

is cancelled. 

Kalle L. Wardlow, 

Federal Register Liaison, Publications and 

Regulations, Associate Chief Counsel, 

(Procedure & Administration). 

[FR Doc. 2024–21039 Filed 9–16–24; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–116787–23] 

RIN 1545–BR31 

Definition of the Term ‘‘Coverage 

Month’’ for Computing the Premium 

Tax Credit 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and public hearing. 

SUMMARY: This document contains 

proposed regulations that would amend 

the definition of ‘‘coverage month’’ and 

amend certain other rules in existing 

income tax regulations regarding the 

computation of an individual taxpayer’s 

premium tax credit (PTC). The proposed 

coverage month amendment generally 

would provide that, in computing a 

PTC, a month may be a coverage month 

for an individual if the amount of the 

premium paid, including by advance 

payments of the PTC (APTC), for the 

month for the individual’s coverage is 

sufficient to avoid termination of the 

individual’s coverage for that month. 

The proposal also would amend the 

existing regulations relating to the 

amount of enrollment premiums used in 

computing the taxpayer’s monthly PTC 

if a portion of the monthly enrollment 

premium for a coverage month is 

unpaid. Finally, the proposed 

regulations would clarify when an 

individual is considered to be ineligible 

for coverage under a State’s Basic Health 

Program (BHP). The proposed 

regulations would affect taxpayers who 

enroll themselves, or enroll a family 

member, in individual health insurance 

coverage through a Health Insurance 

Exchange (Exchange) and may be 

allowed a PTC for the coverage. This 

document also provides a notice of a 

public hearing on these proposed 

regulations. 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 75985 

1The Affordable Care Act (or ACA) refers to the 

Patient Protection and Affordable Care Act (Pub. L. 

111–148, enacted on March 23, 2010), as amended 

by the Health Care and Education Reconciliation 

Act of 2010 (Pub. L. 111–152, enacted on March 30, 

2010). 

DATES: Electronic or written comments 

must be received by November 1, 2024. 

A public hearing on this proposed 

regulation has been scheduled for 

December 13, 2024, at 10:00 a.m. ET. 

Requests to speak and outlines of topics 

to be discussed at the public hearing 

must be received by November 1, 2024. 

If no outlines are received by November 

1, 2024, the public hearing will be 

cancelled. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at https://

www.regulations.gov (indicate IRS and 

REG–116787–23) by following the 

online instructions for submitting 

comments. Once submitted to the 

Federal eRulemaking Portal, comments 

cannot be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

for public availability any comments to 

the IRS’s public docket. Send paper 

submissions to: CC:PA:01:PR (REG– 

116787–23), Room 5203, Internal 

Revenue Service, P.O. Box 7604, Ben 

Franklin Station, Washington, DC 

20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Clara Raymond at (202) 317–4718; 

concerning submission of comments or 

outlines, or requests for a public 

hearing, Vivian Hayes at (202) 317–6901 

(not toll-free numbers) or 

publichearings@irs.gov (preferred). 

SUPPLEMENTARY INFORMATION: 

Authority 

This document contains proposed 

amendments to the Income Tax 

Regulations (26 CFR part 1) under 

section 36B of the Internal Revenue 

Code (Code). Section 36B(h) provides an 

express delegation of authority for the 

Secretary of the Treasury or her delegate 

to prescribe regulations as may be 

necessary to carry out section 36B, 

including regulations that provide for 

the coordination of the credit allowed 

under 36B with the program for advance 

payment of the credit under section 

1412 of the Affordable Care Act.1 The 

proposed regulations are also issued 

under the express delegation of 

authority under section 7805 of the 

Code. 

Background 

I. Definition of ‘‘Coverage Month’’ and 

Computation of PTC 

Section 36B provides a PTC for 

applicable taxpayers who meet certain 

eligibility requirements, including that a 

member of the taxpayer’s family enrolls 

in a qualified health plan (QHP) through 

an Exchange for one or more ‘‘coverage 

months.’’ 

Section 1.36B–3(c)(1) provides that a 

month is a coverage month for an 

individual if (i) as of the first day of the 

month, the individual is enrolled in a 

QHP through an Exchange; (ii) the 

taxpayer pays the taxpayer’s share of the 

premium for the individual’s coverage 

under the plan for the month by the 

unextended due date for filing the 

taxpayer’s income tax return for that 

taxable year, or the full premium for the 

month is paid by APTC; and (iii) the 

individual is not eligible for the full 

calendar month for minimum essential 

coverage (within the meaning of 

§ 1.36B–2(c)) other than coverage 

described in section 5000A(f)(1)(C) of 

the Code (relating to coverage in the 

individual market). 

Section 1.36B–3(d)(1) provides that 

the PTC (also called the premium 

assistance amount) for a coverage month 

is the lesser of (i) the premiums for the 

month, reduced by any amounts that 

were refunded, for one or more QHPs in 

which a taxpayer or a member of the 

taxpayer’s family enrolls (enrollment 

premiums); or (ii) the excess of the 

adjusted monthly premium for the 

applicable benchmark plan over 1⁄12 of 

the product of a taxpayer’s household 

income and the applicable percentage 

for the taxable year. Family is defined 

in § 1.36B–1(d), and the applicable 

percentage is defined in § 1.36B–3(g). 

Section 36B(f)(3) and § 1.36B–5 

require Exchanges to report to QHP 

enrollees and the IRS certain 

information, including monthly 

enrollment premiums, needed to 

compute the PTC allowed for the 

enrollee. This information is reported to 

enrollees on IRS Form 1095–A, Health 

Insurance Marketplace Statement. The 

Centers for Medicare & Medicaid 

Services (CMS), part of the Department 

of Health and Human Services (HHS), is 

responsible for the Form 1095–A 

reporting for Exchanges that use the 

Federal eligibility and enrollment 

platform (Federally-facilitated 

Exchanges, or FFEs, and State-based 

Exchanges on the Federal platform, or 

SBE–FPs). State Exchanges with their 

own platforms (State Exchanges) are 

responsible for the Form 1095–A 

reporting for individuals who enroll in 

their State Exchange. 

HHS regulations at 45 CFR 156.270(d) 

implement section 1412(c)(2)(B)(iv)(II) 

of the Affordable Care Act to require 

issuers of QHPs to allow a ‘‘grace 

period’’ for enrollees for whom APTC is 

paid but who fail to timely pay their 

share of the premium for the coverage. 

In general, a QHP issuer must provide 

a grace period of 3 consecutive months 

for such an enrollee before the issuer 

may terminate the enrollee’s coverage. 

During the first month of the grace 

period, the QHP issuer must pay all 

appropriate claims for services 

rendered, and, during the second and 

third months of the grace period, the 

QHP issuer may pend claims. 

HHS regulations at 45 CFR 155.400(g) 

allow issuers to implement a premium 

payment threshold policy under which 

issuers can consider enrollees to have 

paid all amounts due if the enrollees 

pay an amount sufficient to maintain a 

percentage of total premium paid out of 

the total premium owed equal to or 

greater than a level prescribed by the 

issuer, provided that the level and the 

policy are applied in a uniform manner 

to all enrollees. If an enrollee satisfies 

these conditions, the issuer may provide 

coverage even though the full 

enrollment premium is not paid. 

In certain States, issuers also may 

provide coverage without payment of 

the full enrollment premium if a State 

department of insurance prohibits an 

issuer from terminating QHP coverage 

during a declared emergency. 

For a month for which a taxpayer’s 

share of the enrollment premium is not 

paid in full, the current instructions for 

Form 1095–A require Exchanges to 

report $0 on Form 1095–A as the 

enrollment premium for that month, 

which signals to the taxpayer and the 

IRS that no PTC is allowed for that 

month (non-payment month) because a 

month in which the premium is not 

paid in full is not a coverage month. 

Thus, if an individual is enrolled in a 

QHP with APTC for a month but does 

not pay the full amount of the monthly 

premium as permitted under 45 CFR 

156.270(d), 45 CFR 155.400(g), or 

applicable State law, $0 should be 

reported as the enrollment premium for 

the month, and a PTC is not allowed for 

that month for the coverage. 

CMS has informed the Treasury 

Department and the IRS that, because 

CMS is not the entity that collects 

premium payments from an enrollee, 

implementing the section 36B definition 

of coverage month is challenging for 

CMS in situations in which the 

taxpayer’s share of the premium is not 

paid in full but the taxpayer (or the 

taxpayer’s enrollee) nevertheless may 

remain enrolled in a QHP with APTC, 


ddrumheller on DSK120RN23PROD with PROPOSALS1
75986 Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 

2CMS AUTHORIZED HUNDREDS OF MILLIONS 

OF DOLLARS IN ADVANCED PREMIUM TAX 

CREDITS ON BEHALF OF ENROLLEES WHO DID 

NOT MAKE THEIR REQUIRED PREMIUM 

PAYMENTS (A–02–19–02005), OIG, March 2021, 

accessed at https://oig.hhs.gov/oas/reports/region2/ 

21902005.pdf. 

3Under the authority in section 5000A(f)(1)(A) 

and § 1.5000A–2(f)(1)(E), coverage through a BHP 

standard health plan has been recognized as 

minimum essential coverage. See 42 CFR 600.5. 

if applicable, under 45 CFR 156.270(d), 

45 CFR 155.400(g), or applicable State 

law. An audit by the HHS Office of 

Inspector General 2 found that CMS 

currently reports to FFE and SBE–FP 

enrollees and the IRS on Form 1095–A 

the full enrollment premium for the first 

month of a grace period, 

notwithstanding that the taxpayer’s 

share of the full premium for that month 

may never have been paid. Similarly, 

CMS currently reports to FFE and SBE– 

FP enrollees and the IRS on Form 1095– 

A the full enrollment premium (1) for 

months for which an issuer provides 

coverage to enrollees who satisfy the 

premium payment threshold, and (2) for 

months for which an issuer has been 

ordered by a State department of 

insurance, during a declared emergency, 

not to terminate an enrollee’s coverage 

for the month even though the full 

premium has not been paid. 

Consequently, for these two scenarios as 

well as the grace period scenario, FFEs 

and SBE–FPs treat a month as a 

coverage month for which APTC is 

allowed, and the IRS would not have 

information to disallow a PTC for the 

month because the full enrollment 

premium is reported for the month. 

In contrast, some State Exchanges 

have been reporting $0 as the 

enrollment premium for the first month 

of a grace period and for certain other 

months for which coverage was 

provided without the taxpayer’s share of 

the full premium being paid. 

Consequently, taxpayers in these State 

Exchanges generally are unable to claim 

a PTC for those months. 

II. Determination of Ineligibility for a 

State’s BHP 

As noted in section I of this 

Background, § 1.36B–3(c)(1) provides 

that a month is a coverage month for an 

individual only if, among other 

requirements, the individual is not 

eligible for the full calendar month for 

minimum essential coverage (within the 

meaning of § 1.36B–2(c)) other than 

coverage described in section 

5000A(f)(1)(C) of the Code (relating to 

coverage in the individual market). 

Under section 5000A(f)(1)(A) and 

§ 1.5000A–2, the term ‘‘minimum 

essential coverage’’ includes coverage 

under government-sponsored programs 

such as Medicaid, Children’s Health 

Insurance Program (CHIP), and a State’s 

BHP.3

Section 1.36B–2(c)(2)(i) provides that, 

for purposes of determining whether a 

given month is a coverage month for an 

individual, an individual generally is 

considered eligible for governmentsponsored minimum essential coverage 

if the individual meets the criteria for 

coverage under a government-sponsored 

program described in section 

5000A(f)(1)(A) as of the first day of the 

first full month the individual may 

receive benefits under the program. 

Section 1.36B–2(c)(2)(v) provides that 

an individual is treated as not eligible 

for Medicaid, CHIP, or a similar 

program for a period of coverage under 

a QHP if, when the individual enrolls in 

the QHP, an Exchange determines or 

considers (within the meaning of 45 

CFR 155.302(b)) the individual to be not 

eligible for Medicaid or CHIP. 

Under 42 U.S.C. 18051 and the 

implementing regulations at 42 CFR part 

600, a State is allowed to establish a 

BHP for eligible individuals. Section 

18051(e) provides that a resident of a 

State cannot be an eligible individual 

unless the individual is not eligible to 

enroll in the State’s Medicaid program 

under title XIX of the Social Security 

Act for benefits that at a minimum 

consist of the essential health benefits 

described in 42 U.S.C. 18022(b). 

The Treasury Department and the IRS 

have become aware that the rule in 

§ 1.36B–2(c)(2)(v) relating to an 

individual being considered ineligible 

for coverage under a Medicaid, CHIP, or 

a similar program, is ambiguous as it 

applies to a State’s BHP and should be 

clarified. 

Explanation of Provisions 

I. Change to the Definition of ‘‘Coverage 

Month’’ and Conforming Amendments 

to PTC Computation 

As explained in the Background 

section of this preamble, a PTC 

generally is allowed for a taxpayer for 

months that are coverage months for the 

taxpayer and other individuals in the 

taxpayer’s family. Further, under 

§ 1.36B–3(c)(1)(ii), a month is not a 

coverage month for an individual unless 

the taxpayer pays the taxpayer’s full 

share of the premium for the 

individual’s coverage under the plan for 

the month by the unextended due date 

for filing the taxpayer’s income tax 

return for that taxable year, or the full 

premium for the month is paid by 

APTC. 

Under HHS regulations at 45 CFR 

156.270(d), issuers must provide 

coverage to enrollees for whom APTC is 

paid in the first month of a grace period, 

even if the enrollee’s share of the 

premium for the coverage is unpaid. 

Thus, in that situation, the amount of 

the total premium paid by APTC is 

sufficient to allow for enrollees to 

remain covered. In addition, as noted in 

the Background section, Exchanges are 

not consistent in the manner they report 

enrollment premiums for the first month 

of a grace period, with some reporting 

the full premium for the month and 

others reporting $0. This inconsistent 

reporting may lead to disparate 

treatment among taxpayers, with some 

being allowed to claim a PTC for the 

first month of a grace period and others 

being denied PTC for such a month. The 

Treasury Department and the IRS are of 

the view that amending the coverage 

month rule would promote reporting 

consistency and thus would achieve 

more consistent treatment among 

taxpayers. Moreover, because HHS 

regulations require issuers to provide 

coverage for the first month of a grace 

period to enrollees for whom APTC is 

paid for that month, it is reasonable to 

provide consistent treatment for tax 

purposes. Thus, the proposed 

regulations would treat the first month 

of a grace period as a coverage month 

for PTC purposes if the other coverage 

month requirements in § 1.36B–3(c) are 

satisfied. These proposed regulations 

are consistent with the express 

delegation of authority in section 

36B(h)(1) to provide regulations that 

provide for coordination of the section 

36B credit allowed with the APTC 

program. 

In addition to addressing the first 

month of a grace period, the proposed 

regulations would address two other 

scenarios in which an issuer provides 

coverage even though the full 

enrollment premium is not paid as 

permitted under applicable law. In the 

first scenario, some issuers provide 

coverage for a month as long as at least 

a certain portion of the enrollee’s 

premium for the month is paid, as 

permitted under CMS’s premium 

payment threshold policy. The Treasury 

Department and the IRS are of the view 

that a month for which coverage is 

provided because a premium payment 

threshold is met should not fail to be a 

coverage month solely because the full 

premium has not been paid. Otherwise, 

a taxpayer could have monthly PTC 

disallowed due to a relatively small 

amount of unpaid premium, resulting in 

a tax liability that far exceeds the 

amount of the unpaid premium, for a 


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Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 75987 

month in which the amount paid for the 

coverage met the threshold for the 

provision of coverage permitted by 

HHS. 

The second scenario involves a State 

department of insurance prohibiting an 

issuer from terminating QHP coverage 

during a declared emergency. In this 

scenario, if the issuer provides coverage 

for a month even though the enrollee’s 

portion of the premium has not been 

fully paid, the Treasury Department and 

the IRS are of the view that the month 

should not fail to be a coverage month 

solely because the full premium has not 

been paid. This month should be treated 

as a coverage month because the 

portion, if any, of the premium that was 

paid is sufficient to provide coverage to 

the enrollees during an emergency 

situation under applicable State law. 

Consequently, pursuant to the express 

delegations of authority in sections 

36B(h) and 7805, the proposed 

regulations would provide that, under 

these three scenarios, a month may be 

a coverage month for a taxpayer 

irrespective of whether the full 

premium for the month is paid by the 

unextended due date of the taxpayer’s 

return for the year of coverage. The 

Treasury Department and the IRS 

request comments on whether there are 

other scenarios in which an issuer does 

not terminate coverage for a month for 

which the full premium has not been 

paid and whether such a month should 

be treated as a coverage month. 

The proposed amendment to the 

definition of ‘‘coverage month’’ in 

§ 1.36B–3(c)(1) would require a 

conforming change to the calculation of 

the monthly PTC amount under 

§ 1.36B–3(d)(1)(i), which provides, in 

effect, that monthly PTC for a coverage 

month cannot exceed the premiums for 

the month, reduced by any amounts that 

were refunded in the same taxable year 

as the premium liability. If a month in 

which a portion of the enrollment 

premiums is unpaid is a coverage 

month, the premium used to compute 

the PTC for the month should not 

include the unpaid portion. Otherwise, 

a taxpayer could receive a monthly PTC 

for coverage that exceeds the amount of 

the premium paid for the coverage, 

which would result in an undue 

windfall to the taxpayer. In addition, as 

noted previously, existing regulations 

require, in computing monthly PTC, 

enrollment premiums to be reduced by 

amounts refunded in the year of 

coverage. Consistent with the existing 

rule for computing monthly PTC, the 

premiums used for computing monthly 

PTC under the proposed rule also 

should be reduced by unpaid amounts. 

Thus, pursuant to the express 

delegations of authority in sections 

36B(h) and 7805, the proposed 

regulations would provide that the 

premium for a month to be considered 

in determining PTC for an individual’s 

coverage must be reduced by amounts 

refunded in the same taxable year as the 

premium liability is incurred and by 

any portion of the premium that is 

unpaid as of the unextended due date 

for filing the taxpayer’s income tax 

return for the taxable year that includes 

the month. Taxpayers would be 

instructed to comply with this rule by 

reducing their enrollment premiums on 

Form 8962, Premium Tax Credit (PTC), 

for a coverage month by any amount 

that remains unpaid as of the 

unextended due date of their return. 

II. Determination of Ineligibility for 

Medicaid, CHIP, or a Similar Program 

As discussed in the Background 

section of this preamble, § 1.36B– 

2(c)(2)(v) provides that an individual is 

treated as not eligible for Medicaid, 

CHIP, or a similar program for a period 

of coverage under a QHP if, when the 

individual enrolls in the QHP, an 

Exchange determines or assesses the 

individual to be not eligible for 

Medicaid or CHIP. The first part of the 

sentence references ‘‘Medicaid, CHIP or 

similar program,’’ which includes a 

State’s BHP. See 81 FR 91755, 91756. 

However, the second part of the 

sentence references only Medicaid or 

CHIP determinations under 45 CFR 

155.302(b) and says nothing about 

determinations of eligibility under 

similar programs such as State BHPs. 

The unintended consequence of this 

language is that an individual who 

meets the criteria for coverage under a 

State BHP could be considered 

ineligible for the BHP coverage if the 

Exchange determines that the individual 

is ineligible for Medicaid or CHIP. 

Based on the Exchange determination of 

ineligibility for Medicaid or CHIP, the 

individual could enroll in a QHP and be 

allowed a PTC for the QHP coverage. 

Consequently, pursuant to the express 

delegations of authority in sections 

36B(h) and 7805, the proposed 

regulations would clarify that an 

individual is treated as not eligible for 

Medicaid, CHIP, or a similar program 

such as a State BHP, for a period of 

coverage under a QHP if, when the 

individual enrolls in the QHP, an 

Exchange conducts an eligibility 

determination or, if applicable, 

eligibility assessment (within the 

meaning of 45 CFR 155.302(b)) for 

Medicaid, CHIP, or a similar program 

and determines or assesses the 

individual to be not eligible for coverage 

under the program. Thus, under the 

proposed revision, an individual’s 

determination of ineligibility for 

Medicaid or CHIP would not affect 

whether the individual is treated as 

ineligible for BHP coverage for purposes 

of determining whether a PTC is 

allowed. 

III. Severability 

If any provision in this rulemaking is 

held to be invalid or unenforceable 

facially, or as applied to any person or 

circumstance, it shall be severable from 

the remainder of this rulemaking, and 

shall not affect the remainder thereof, or 

the application of the provision to other 

persons not similarly situated or to 

other dissimilar circumstances. 

Statement of Availability of IRS 

Documents 

Guidance cited in this preamble is 

published in the Internal Revenue 

Bulletin and is available from the 

Superintendent of Documents, U.S. 

Government Publishing Office, 

Washington, DC 20402, or by visiting 

the IRS website at https://www.irs.gov. 

Proposed Applicability Dates 

The proposed regulations under 

§§ 1.36B–2 and 1.36B–3 are proposed to 

apply for taxable years beginning on or 

after the first date of the calendar year 

that begins after the date these 

regulations are published as final 

regulations in the Federal Register. 

Special Analyses 

I. Regulatory Planning and Review 

Pursuant to the Memorandum of 

Agreement, Review of Treasury 

Regulations under Executive Order 

12866 (June 9, 2023), tax regulatory 

actions issued by the IRS are not subject 

to the requirements of section 6 of 

Executive Order 12866, as amended. 

Therefore, a regulatory impact 

assessment is not required. 

II. Paperwork Reduction Act 

These proposed regulations do not 

impose any additional information 

collection requirements in the form of 

reporting, recordkeeping requirements, 

or third-party disclosure statements. 

Taxpayers who claim PTC on their 

income tax returns are required to file 

Form 8962, which is the sole collection 

of information requirement imposed by 

section 36B and the regulations under 

section 36B. The rules in these proposed 

regulations, if finalized, would require 

the IRS to revise the instructions for 

Form 8962. For purposes of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(c)), the reporting burden 

associated with the collection of 

information for Form 8962 will be 


ddrumheller on DSK120RN23PROD with PROPOSALS1
75988 Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 

reflected in the PRA submission 

associated with income tax returns 

under the OMB control number 1545– 

0074. To the extent there is a change in 

burden because of these proposed 

regulations, the change in burden will 

be reflected in the updated burden 

estimates for Form 8962. 

III. Regulatory Flexibility Act 

When an agency issues a proposed 

rulemaking, the Regulatory Flexibility 

Act (5 U.S.C. chapter 6) (RFA) requires 

the agency to ‘‘prepare and make 

available for public comment an initial 

regulatory flexibility analysis’’ that 

‘‘describe[s] the impact of the proposed 

rule on small entities.’’ See 5 U.S.C. 

603(a). The term ‘‘small entities’’ is 

defined in 5 U.S.C. 601 to mean ‘‘small 

business,’’ ‘‘small organization,’’ and 

‘‘small governmental jurisdiction,’’ 

which are also defined in 5 U.S.C. 601. 

Small business size standards define 

whether a business is ‘‘small’’ and have 

been established for types of economic 

activities, or industry, generally under 

the North American Industry 

Classification System (NAICS). See title 

13, part 121 of the Code of Federal 

Regulations (Small Business Size 

Regulations). The size standards look at 

various factors, including annual 

receipts, number of employees, and 

amount of assets, to determine whether 

the business is small. See title 13, 

§ 121.201 of the Code of Federal 

Regulations for the Small Business Size 

Standards by NAICS Industry. 

Section 605 of the RFA provides an 

exception to the requirement to prepare 

an initial regulatory flexibility analysis 

if the agency certifies that the proposed 

rulemaking will not have a significant 

economic impact on a substantial 

number of small entities. The Treasury 

Department and the IRS hereby certify 

that these proposed regulations will not 

have a significant economic impact on 

a substantial number of small entities. 

This certification is based on the fact 

that the majority of the effect of the 

proposed regulations falls on individual 

taxpayers, and entities will experience 

only small changes. 

Pursuant to section 7805(f) of the 

Code, these proposed regulations have 

been submitted to the Chief Counsel for 

the Office of Advocacy of the Small 

Business Administration for comment 

on their impact on small business. 

IV. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess anticipated costs 

and benefits and take certain other 

actions before issuing a final rule that 

includes any Federal mandate that may 

result in expenditures in any one year 

by a State, local, or Tribal government, 

in the aggregate, or by the private sector, 

of $100 million (updated annually for 

inflation). This proposed rule does not 

include any Federal mandate that may 

result in expenditures by State, local, or 

Tribal governments, or by the private 

sector in excess of that threshold. 

V. Executive Order 13132: Federalism 

E.O. 13132 (Federalism) prohibits an 

agency from publishing any rule that 

has federalism implications if the rule 

either imposes substantial, direct 

compliance costs on State and local 

governments, and is not required by 

statute, or preempts State law, unless 

the agency meets the consultation and 

funding requirements of section 6 of the 

E.O. This proposed rule does not have 

federalism implications and does not 

impose substantial direct compliance 

costs on State and local governments or 

preempt State law within the meaning 

of the E.O. 

Comments and Public Hearing 

Before these proposed regulations are 

adopted as final regulations, 

consideration will be given to comments 

that are submitted timely to the IRS as 

prescribed in this preamble in the 

ADDRESSES section. The Treasury 

Department and the IRS request 

comments on all aspects of the proposed 

regulations, including the economic 

impact of the proposed regulations. Any 

electronic comments submitted, and to 

the extent practicable any paper 

comments submitted, will be made 

available at www.regulations.gov or 

upon request. 

A public hearing is being held on 

December 13, 2024, beginning at 10:00 

a.m. ET, in the Auditorium at the 

Internal Revenue Service Building, 1111 

Constitution Avenue NW, Washington, 

DC. Due to building security 

procedures, visitors must enter at the 

Constitution Avenue entrance. In 

addition, all visitors must present photo 

identification to enter the building. 

Because of access restrictions, visitors 

will not be admitted beyond the 

immediate entrance area more than 30 

minutes before the hearing starts. 

Participants may alternatively attend the 

public hearing by telephone. 

The rules of 26 CFR 601.601(a)(3) 

apply to the hearing. Persons who wish 

to present oral comments at the hearing 

must submit an outline of the topics to 

be discussed as well as the time to be 

devoted to each topic by November 1, 

2024. A period of ten minutes will be 

allocated to each person for making 

comments. After the deadline for 

receiving outlines has passed, the IRS 

will prepare an agenda containing the 

schedule of speakers. Copies of the 

agenda will be made available free of 

charge at the hearing. If no outlines of 

the topics to be discussed at the hearing 

are received by November 1, 2024, the 

public hearing will be cancelled. If the 

public hearing is cancelled, a notice of 

cancellation of the public hearing will 

be published in the Federal Register. 

Individuals who want to testify in 

person at the public hearing must send 

an email to publichearings@irs.gov to 

have their name added to the building 

access list. The subject line of the email 

must contain the regulation number 

REG–116787–23 and the language 

TESTIFY In Person. For example, the 

subject line may say: Request to 

TESTIFY In Person at Hearing for REG– 

116787–23. 

Individuals who want to testify by 

telephone at the public hearing must 

send an email to publichearings@irs.gov 

to receive the telephone number and 

access code for the hearing. The subject 

line of the email must contain the 

regulation number REG–116787–23 and 

the language TESTIFY Telephonically. 

For example, the subject line may say: 

Request to TESTIFY Telephonically at 

Hearing for REG–116787–23. 

Individuals who want to attend the 

public hearing in person without 

testifying must also send an email to 

publichearings@irs.gov to have their 

name added to the building access list. 

The subject line of the email must 

contain the regulation number REG– 

116787–23 and the language ATTEND 

In Person. For example, the subject line 

may say: Request to ATTEND Hearing in 

Person for REG–116787–23. Requests to 

attend the public hearing must be 

received by 5:00 p.m. ET on December 

11, 2024. 

Individuals who want to attend the 

public hearing telephonically without 

testifying must also send an email to 

publichearings@irs.gov to receive the 

telephone number and access code for 

the hearing. The subject line of the 

email must contain the regulation 

number REG–116787–23 and the 

language ATTEND Hearing 

Telephonically. For example, the 

subject line may say: Request to 

ATTEND Hearing Telephonically for 

REG–116787–23. Requests to attend the 

public hearing must be received by 5:00 

p.m. ET on December 11, 2024. 

Hearings will be made accessible to 

people with disabilities. To request 

special assistance during the hearing, 

contact the Publications and 

Regulations Branch of the Office of 

Associate Chief Counsel (Procedure and 

Administration) by sending an email to 

publichearings@irs.gov (preferred) or by 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 75989 

telephone at (202) 317–6901 (not a tollfree number) by at least December 10, 

2024. 

Statement of Availability of IRS 

Documents 

Guidance cited in this preamble is 

published in the Internal Revenue 

Bulletin and is available from the 

Superintendent of Documents, U.S. 

Government Publishing Office, 

Washington, DC 20402, or by visiting 

the IRS website at https://www.irs.gov. 

Drafting Information 

The principal author of these 

proposed regulations is Clara L. 

Raymond of the Office of Associate 

Chief Counsel (Income Tax and 

Accounting). However, other personnel 

from the Treasury Department and the 

IRS participated in the development of 

the regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, the Treasury Department 

and the IRS propose to amend 26 CFR 

part 1 as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 is amended by adding entries 

in numerical order for §§ 1.36B–1 

through 1.36B–3, and 1.36B–6, and 

revising the entries for §§ 1.36B–0, 

1.36B–4, and 1.36B–5 to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

* * * * * 

Section 1.36B–0 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–1 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–2 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–3 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–4 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–5 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–6 also issued under 26 

U.S.C. 36B(h). 

* * * * * 

■ Par. 2. Section 1.36B–2 is amended 

by: 

■ 1. Revising the first sentence in 

paragraph (c)(2)(v); 

■ 2. Revising paragraph (e)(1); and 

■ 3. Adding paragraph (e)(6). 

The revisions and addition read as 

follows: 

§ 1.36B–2 Eligibility for premium tax 

credit. 

* * * * * 

(c) * * * 

(2) * * * 

(v) * * * An individual is treated as 

not eligible for Medicaid, CHIP, or a 

similar program such as a Basic Health 

Program, for a period of coverage under 

a qualified health plan if, when the 

individual enrolls in the qualified 

health plan, an Exchange conducts an 

eligibility determination or, if 

applicable, eligibility assessment 

(within the meaning of 45 CFR 

155.302(b)) for Medicaid, CHIP, or a 

similar program and determines or 

assesses the individual to be not eligible 

for coverage under the program. * * * 

* * * * * 

(e) * * * 

(1) Except as provided in paragraphs 

(e)(2) through (6) of this section, this 

section applies to taxable years ending 

after December 31, 2013. 

* * * * * 

(6) The first sentence of paragraph 

(c)(2)(v) of this section applies to taxable 

years beginning on or after [insert the 

first date of the calendar year that begins 

after the date of publication of the final 

regulations in the Federal Register]. The 

first sentence of paragraph (c)(2)(v) of 

this section, as contained in 26 CFR part 

I edition revised as of April 1, 2024, 

applies to taxable years ending after 

December 31, 2013, and beginning 

before [insert the first date of the 

calendar year that begins after the date 

of publication of the final regulations in 

the Federal Register]. 

Par. 3. Section 1.36B–3 is amended 

by: 

■ 1. Revising paragraph (c)(1)(ii); 

■ 2. Redesignating paragraphs (c)(4) and 

(c)(5) as paragraphs (c)(5) and (c)(6), 

respectively, and adding new paragraph 

(c)(4); 

■ 3. Revising paragraph (d)(1)(i); 

■ 4. Revising paragraph (n). 

The revisions and additions read as 

follows: 

§ 1.36B–3 Computing the premium 

assistance credit amount. 

* * * * * 

(c) * * * 

(1) * * * 

(ii) The taxpayer pays the taxpayer’s 

share of the premium for the 

individual’s coverage under the plan for 

the month by the unextended due date 

for filing the taxpayer’s income tax 

return for that taxable year, the full 

premium for the month is paid by 

advance credit payments, or the amount 

of the premium paid (including by 

advance credit payments) for the month 

is sufficient to avoid termination of the 

individual’s coverage for that month 

under one of the scenarios described in 

paragraph (c)(4) of this section; and 

* * * * * 

(4) Scenarios for payments sufficient 

to avoid coverage termination. The 

scenarios under which the amount of 

the premium paid (including by 

advance credit payments) for the month 

is sufficient to avoid termination of an 

individual’s coverage for that month 

under paragraph (c)(1)(ii) of this section 

are the following: 

(i) The first month of a grace period 

described in 45 CFR 156.270(d) for the 

individual. 

(ii) A month for which a premium 

payment threshold under 45 CFR 

155.400(g) has been met and for which 

month the issuer of the individual’s 

qualified health plan provides coverage. 

(iii) A month for which a State 

department of insurance has, during a 

declared emergency, issued an order 

prohibiting the issuer of the individual’s 

qualified health plan from terminating 

the individual’s coverage for the month 

irrespective of whether the full 

premium for the month is made. 

* * * * * 

(d) * * * 

(1) * * * 

(i) The enrollment premiums, which 

are the premiums for the month for one 

or more qualified health plans in which 

a taxpayer or a member of the taxpayer’s 

family enrolls, reduced by any 

amounts— 

(A) Refunded in the same taxable year 

as the premium liability is incurred; or 

(B) Unpaid as of the unextended due 

date for filing the taxpayer’s income tax 

return for the taxable year that includes 

the month, or 

* * * * * 

(n) Applicability dates. (1) Except as 

provided in paragraphs (n)(2) through 

(4) of this section, this section applies 

to taxable years ending after December 

31, 2013. 

(2) Paragraphs (d)(1) (except for 

paragraph (d)(1)(i)) and (d)(2) of this 

section apply to taxable years beginning 

after December 31, 2016. Paragraph (f) of 

this section applies to taxable years 

beginning after December 31, 2018. 

Paragraphs (d)(1) and (d)(2) of § 1.36B– 

3, as contained in 26 CFR part I edition 

revised as of April 1, 2016, apply to 

taxable years ending after December 31, 

2013, and beginning before January 1, 

2017. Paragraph (f) of § 1.36B–3, as 

contained in 26 CFR part I edition 

revised as of April 1, 2016, applies to 

taxable years ending after December 31, 

2013, and beginning before January 1, 

2019. 

(3) Paragraphs (c)(4) through (6) of 

this section apply to taxable years 


ddrumheller on DSK120RN23PROD with PROPOSALS1
75990 Federal Register / Vol. 89, No. 180 / Tuesday, September 17, 2024 / Proposed Rules 

beginning on or after [insert the first 

date of the calendar year that begins 

after the date of publication of final 

regulations in the Federal Register]. 

Paragraph (c)(4) of this section, as 

contained in 26 CFR part I edition 

revised as of April 1, 2024, applies to 

taxable years beginning after December 

31, 2016, and beginning before [insert 

the first date of the calendar year that 

begins after the date of publication of 

the final regulations in the Federal 

Register]. Paragraph (c)(5) of this 

section, as contained in 26 CFR part I 

edition revised as of April 1, 2024, 

applies to taxable years ending after 

December 31, 2013, and beginning 

before [insert the first date of the 

calendar year that begins after the date 

of publication of the final regulations in 

the Federal Register]. 

(4) Paragraph (d)(1)(i) of this section 

applies to taxable years beginning on or 

after [insert the first date of the calendar 

year that begins after the date of 

publication of the final regulations in 

the Federal Register]. Paragraph (d)(1)(i) 

of § 1.36B–3, as contained in 26 CFR 

part I edition revised as of April 1, 2016, 

applies to taxable years ending after 

December 31, 2013, and beginning 

before January 1, 2017. Paragraph 

(d)(1)(i) of § 1.36B–3, as contained in 26 

CFR part I edition revised as of April 1, 

2022, applies to taxable years beginning 

after December 31, 2016, and beginning 

before January 1, 2023. Paragraph 

(d)(1)(i) of § 1.36B–3, as contained in 26 

CFR part I edition revised as of April 1, 

2024, applies to taxable years beginning 

after December 31, 2022, and beginning 

before [insert the first date of the 

calendar year that begins after the date 

of publication of the final regulations in 

the Federal Register]. 

Douglas W. O’Donnell, 

Deputy Commissioner. 

[FR Doc. 2024–20758 Filed 9–16–24; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–106851–21] 

RIN 1545–BQ95 

Tribal General Welfare Benefits 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document contains 

proposed regulations regarding the 

exclusion from gross income of certain 

Tribal general welfare benefits. The 

proposed regulations address the 

requirements that would apply to 

determine whether the benefits that an 

Indian Tribal government program 

provides qualify as Tribal general 

welfare benefits. These proposed 

regulations would affect Indian Tribal 

governments, agencies or 

instrumentalities of such governments, 

Federally-recognized Tribes, members 

of such Tribes, such members’ spouses 

and dependents, and other Tribal 

program participants. This document 

also requests comments on certain 

provisions and provides a notice of a 

public hearing on the proposed 

regulations that will be in addition to 

Tribal consultation on the proposed 

regulations. 

DATES: 

Comments: Electronic or written 

comments on this proposed rule from 

the public must be received by 

December 16, 2024. 

Public Hearing: The public hearing is 

scheduled to be held on January 13, 

2025, at 10 a.m. Eastern time (ET). 

Requests to speak and outlines of topics 

to be discussed at the public hearing 

must be received by December 16, 2024. 

If no outlines are received by December 

16, 2024, the public hearing will be 

cancelled. Requests to attend the public 

hearing must be received by 5 p.m. ET 

on January 9, 2025. Requests for special 

assistance during the hearing must be 

received by 5 p.m. ET on January 8, 

2025. See the Comments and Public 

Hearing section of the SUPPLEMENTARY

INFORMATION for additional information. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at https://

www.regulations.gov (indicate IRS and 

REG–106851–21) by following the 

online instructions for submitting 

comments. Once submitted to the 

Federal eRulemaking Portal, comments 

cannot be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

any comments to the IRS’s public 

docket. Send paper submissions to: 

CC:PA:PR:01 (REG–106851–21), Room 

5203, Internal Revenue Service, P.O. 

Box 7604, Ben Franklin Station, 

Washington, DC 20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

Jonathan A. Dunlap of the Office of 

Associate Chief Counsel (Income Tax 

and Accounting), (202) 317–4718 (not a 

toll-free number); concerning 

submissions of comments or outlines, 

the hearing, or any questions to attend 

the hearing by teleconferencing, 

Publication and Regulations Section at 

(202) 317–6901 (not a toll-free number) 

or preferably by email to 

publichearings@irs.gov. If emailing, 

please include the following 

information in the subject line: Attend, 

Testify, or Question and REG–106851– 

21. 

SUPPLEMENTARY INFORMATION: 

Authority 

This document contains proposed 

amendments to the Income Tax 

Regulations (26 CFR part 1) under 

section 139E of the Internal Revenue 

Code (Code). Section 139E(c)(3) 

provides an express delegation of 

authority for the Secretary of the 

Treasury or her delegate (Secretary) to, 

‘‘in consultation with the Tribal 

Advisory Committee (as established 

under section 3(a) of the Tribal General 

Welfare Exclusion Act of 2014), 

establish guidelines for what constitutes 

lavish or extravagant benefits with 

respect to Indian tribal government 

programs.’’ The proposed regulations 

are also issued under the express 

delegation of authority under section 

7805(a) of the Code. 

Background 

This notice of proposed rulemaking 

contains proposed amendments to the 

Income Tax Regulations (26 CFR part 1) 

to implement section 139E of the 

Internal Revenue Code (Code). 

Section 61 of the Code provides that, 

except as otherwise provided by law, 

the term ‘‘gross income’’ means all 

income from whatever source derived. 

The term ‘‘income’’ is broadly defined 

as ‘‘instances of undeniable accessions 

to wealth, clearly realized, and over 

which the taxpayers have complete 

dominion.’’ Commissioner v. Glenshaw 

Glass Co., 348 U.S. 426, 431 (1955). As 

a general rule, exclusions from income 

are construed narrowly, and taxpayers 

must bring themselves within the clear 

scope of the exclusion for the exclusion 

to apply. Commissioner v. Schleier, 515 

U.S. 323, 328–329 (1995). Tribal 

members are subject to the same 

requirement to pay Federal income 

taxes as non-Tribal members, unless 

exempted by a treaty or agreement 

between the United States and the 

Tribal member’s Tribe or an Act of 

Congress dealing with Indian affairs. 

Squire v. Capoeman, 351 U.S. 1, 6 

(1956). 

Generally, if the provision of a benefit 

satisfies the requirements of section 

139E (discussed in part IV of this 

Background), section 139E will apply to 

exclude the value of the benefit from the 


ddrumheller on DSK120RN23PROD with PROPOSALS1