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[Federal Register Volume 89, Number 243 (Wednesday, December 18, 2024)]
[Rules and Regulations]
[Pages 102721-102726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29651]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 10019]
RIN 1545-BR31

Definition of the Term ``Coverage Month'' for Computing the 
Premium Tax Credit

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations that 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. The coverage month amendment 
generally provides that, in computing a premium tax credit, a month may 
be a coverage month for an individual if the amount of the premium 
paid, including by advance payments of the premium tax credit, for the 
month for the individual's coverage is sufficient to avoid termination 
of the individual's coverage for that month. The final regulations also 
amend the existing regulations relating to the amount of enrollment 
premiums used in computing the taxpayer's monthly premium tax credit if 
a portion of the monthly enrollment premium for a coverage month is 
unpaid. Finally, the final regulations clarify when an individual is 
considered to be not eligible for coverage under a State's Basic Health 
Program. The final regulations affect taxpayers who enroll themselves, 
or enroll a family member, in individual health insurance coverage 
through a Health Insurance Exchange and may be allowed a premium tax 
credit for the coverage.

DATES: 
    Effective date: These final regulations are effective on December 
18, 2024.
    Applicability date: These final regulations apply to taxable years 
beginning on or after January 1, 2025.

FOR FURTHER INFORMATION CONTACT: Clara Raymond at (202) 317-4718 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Authority

    This document contains amendments to the Income Tax Regulations (26 
CFR part 1) under section 36B of the Internal Revenue Code (Code).\1\ 
Section 36B(h) provides an express delegation of authority for the 
Secretary of the Treasury or her delegate (Secretary) to prescribe such 
regulations as may be necessary to carry out section 36B, including 
regulations that provide for the coordination of the premium tax credit 
(PTC) allowed under 36B with the program for advance payments of the 
PTC (APTC) under section 1412 of the Affordable Care Act.\2\ The final 
regulations are also issued under the express delegation of authority 
under section 7805(a), which authorizes the Secretary to ``prescribe 
all needful rules and regulations for the enforcement of [the Code], 
including all rules and regulations as may be necessary by reason of 
any alteration of law in relation to internal revenue.''
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    \1\ Unless otherwise indicated, references to ``section'' or 
``Sec.  '' are to sections of the Code or the Treasury regulations 
issued thereunder.
    \2\ The 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).
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Background

I. Section 36B Rules Relating to Coverage Months and Monthly PTC Amount

    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 a 
Health Insurance Exchange (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 Sec.  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. The term ``family'' is defined in 
Sec.  1.36B-1(d), and the applicable percentage is defined in Sec.  
1.36B-3(g).
    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 government-sponsored 
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.

[[Page 102722]]

    Section 36B(f)(3) and Sec.  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 a QHP through their State 
Exchange.

II. HHS Rules Relating to Coverage When Premiums Are Unpaid

    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 the 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.

III. Proposed Regulations

    On September 17, 2024, the Department of the Treasury (Treasury 
Department) and the IRS published a notice of proposed rulemaking (REG-
116787-23) in the Federal Register (89 FR 75984) under section 36B 
(proposed regulations). The proposed regulations would have changed the 
definition of ``coverage month'' in Sec.  1.36B-3(c)(1) for some 
scenarios for which the full premium for the month is unpaid by the 
unextended due date of the taxpayer's return for the year of coverage, 
provided the amount of the premium paid for the month, including by 
APTC, is sufficient to avoid termination of the individual's coverage 
for that month. The proposed regulations would have provided that a 
month for which the enrollment premium is not fully paid may be a 
coverage month in the following scenarios: (i) the first month of a 
grace period described in 45 CFR 156.270(d); (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; and (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 paid.
    The proposed amendment to the definition of ``coverage month'' 
would have required a conforming change to the calculation of the 
monthly PTC amount under Sec.  1.36B-3(d)(1)(i) so that the premium for 
a month to be considered in determining the monthly PTC for an 
individual's coverage would be reduced 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.
    Finally, the proposed regulations would have clarified Sec.  1.36B-
2(c)(2)(v) to provide that an individual is treated as not eligible for 
Medicaid, CHIP, or a similar program such as a State's Basic Health 
Program (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.
    The Treasury Department and the IRS received nine public comments 
in response to the notice of proposed rulemaking. Copies of the 
comments are available for public inspection at https://www.regulations.gov or upon request. A public hearing on the proposed 
regulations was scheduled for December 13, 2024. There were no requests 
to speak at the scheduled public hearing. Consequently, the public 
hearing was cancelled. After considering all the comments received, the 
Treasury Department and the IRS adopt the proposed regulations without 
modifications.

Summary of Comments and Explanation of Revisions

I. Overview

    All nine public comments on the proposed regulations were in 
support of the rules in the proposed regulations. One commenter 
requested that the final regulations include detailed requirements, 
expectations, and examples relating to reporting by Exchanges of 
enrollment premiums and second lowest cost silver plan (SLCSP) premiums 
on Form 1095-A for a month for which a taxpayer's share of the 
enrollment premium is not paid in full (non-payment month) that may be 
a coverage month. Another commenter requested that all non-payment 
months for which coverage is provided be considered coverage months. 
Finally, several commenters requested flexibility for Exchanges to 
comply with the new coverage month rule. The comments are addressed in 
more detail in Parts II through IV of this Summary of Comments and 
Explanation of Revisions.

II. Additional Guidance for Reporting on Form 1095-A

    As discussed in Part I of the Background section of this preamble, 
section 36B(f)(3) and Sec.  1.36B-5 require Exchanges to report to QHP 
enrollees and the IRS certain information needed to compute the PTC 
allowed for the enrollee. This information is reported to enrollees on 
IRS Form 1095-A. The enrollee's monthly enrollment premiums are 
reported in column A of Part III of Form 1095-A and the enrollee's 
monthly second lowest cost silver plan (SLCSP) premiums are reported in 
column B of the form.
    The current instructions for Form 1095-A require Exchanges to 
report $0 in column A of Form 1095-A as the enrollment premium for a 
non-payment month. The instructions also require Exchanges to report $0 
for a non-payment month in column B of Form 1095-A as the amount of the 
taxpayer's SLCSP premium for the month. Reporting $0 as the monthly 
amount in either column A or column B signals to the taxpayer and the 
IRS that this is not a coverage month and, thus, no PTC is allowed for 
the month.

[[Page 102723]]

    One commenter requested that the final regulations include detailed 
requirements, expectations, and examples relating to how Exchanges 
should report enrollment premiums and SLCSP premiums on Form 1095-A for 
non-payment months that may be coverage months. The commenter asked 
that the examples demonstrate how Exchanges should report multiple 
grace periods in a calendar year, mid-month changes, and partial 
payments.
    The commenter's request for detailed guidance on how Exchanges 
should report amounts on Form 1095-A is best addressed in the 
Instructions for Form 1095-A, rather than in regulatory text. The IRS 
intends to revise the 2025 Instructions for Form 1095-A to reflect the 
coverage month changes in these final regulations. Specifically, the 
revised instructions will require Exchanges to report in column A of 
Part III of Form 1095-A the full enrollment premium for any month that 
is a coverage month if such month is (i) the first month of a grace 
period described in 45 CFR 156.270(d) for the plan enrollees; (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; or (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 (the three 
scenarios described in Sec.  1.36B-3(c)(4)). The instructions will 
continue to provide that Exchanges must report $0 in column A for any 
other months for which the full enrollment premium for the month is not 
paid, and that the amount reported in column A should be reduced by any 
enrollment premium refunds or credits.
    Similarly, the instructions for column B of Part III of Form 1095-A 
will be amended to provide that Exchanges should not report $0 as the 
SLCSP premium for any months for which the full enrollment premium is 
not paid, if the month is a coverage month under one of the three 
scenarios described in Sec.  1.36B-3(c)(4). Instead, Exchanges should 
report the SLCSP premium that would apply if the enrollment premium had 
been paid in full.
    With regard to the commenter's request for examples demonstrating 
how to report amounts on Form 1095-A under the final regulations, the 
Treasury Department and the IRS understand that State Exchanges may 
need additional guidance as they proceed with implementation of these 
final regulations. The Treasury Department and the IRS welcome 
additional input and will continue to work with State Exchanges to 
ensure that the Instructions for Form 1095-A adequately address how 
Exchanges should report non-payment months as coverage months under one 
of the three scenarios described in Sec.  1.36B-3(c)(4).

III. Additional Scenarios for Which Non-Payment Months May Be Coverage 
Months

    The proposed regulations included a request for comments on whether 
the final regulations should include scenarios in addition to those 
provided in the proposed regulations regarding non-payment months that 
may be coverage months. One commenter suggested that the final 
regulations should permit all non-payment months to be coverage months 
as long as the amount of the premium paid for the month, including by 
APTC, is sufficient to avoid termination of the individual's coverage 
for that month.
    In drafting the proposed regulations, the Treasury Department and 
the IRS considered but rejected a rule that would allow all non-payment 
months to be coverage months if the amount of the premium paid for the 
month, including by APTC, is sufficient to avoid termination of the 
individual's coverage for the month. As stated in the preamble to the 
proposed regulations, a main reason for amending the coverage month 
definition is to promote reporting consistency among Exchanges 
regarding the reporting of enrollment premiums for non-payment months. 
The Treasury Department and the IRS worked closely with HHS staff to 
identify the three scenarios described in Sec.  1.36B-3(c)(4) as 
scenarios for which there is inconsistent reporting among Exchanges. In 
addition, the Treasury Department and the IRS have determined that an 
open-ended rule that could be interpreted differently by different 
Exchanges, based on their particular State law or practices, would not 
achieve more consistent reporting among Exchanges. Exchanges, as well 
as taxpayers and the IRS, need clarity on the definition of a coverage 
month, and that definition needs to apply uniformly to all taxpayers 
under the Federal tax law. Consequently, the Treasury Department and 
the IRS do not adopt this comment, and the change to the coverage month 
rule in the final regulations applies only for the three scenarios 
described in Sec.  1.36B-3(c)(4).

IV. Applicability Date of Final Regulations

    The proposed regulations provided that the changes under Sec. Sec.  
1.36B-2 and 1.36B-3 were 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. Several commenters noted that State Exchanges will 
need to make extensive changes to their platform architecture to report 
for non-payment months that are coverage months under one of the three 
scenarios described in Sec.  1.36B-3(c)(4) and, thus, requested that 
the final regulations provide adequate time for states to make the 
necessary changes to ensure accurate reporting. One commenter stated 
that a 9-12-month period is generally needed to implement IT changes. 
Another commenter requested that the final rule include detailed 
scenarios addressing the applicability date. One commenter supported 
the proposed applicability date of the next calendar year following the 
date of publication.
    Consistent with the proposed applicability date, the rules in these 
final regulations apply to taxable years beginning on or after January 
1, 2025. Thus, a taxpayer may be allowed a PTC for 2025 for a non-
payment month that is a coverage month as described in these final 
regulations. However, the Treasury Department and the IRS understand 
that Exchanges need time to implement their reporting for the coverage 
month rule in the final regulations, and some Forms 1095-A filed by 
State Exchanges for the 2025 coverage year may not reflect that non-
payment months described in Sec.  1.36B-3(c)(4) are coverage months for 
which a PTC is allowed. Exchanges should do the best they can to timely 
implement the coverage month rule in these final regulations. Exchanges 
are reminded that, because section 36B(f)(3) imposes the requirement on 
Exchanges to report QHP enrollment information to the IRS and to 
Enrollees on Form 1095-A, Form 1095-A is not an information return 
within the meaning of section 6721, and there is no penalty imposed on 
an Exchange for filing a Form 1095-A that does not include all of the 
information required to be shown on the return or that includes 
incorrect information. The Treasury Department and the IRS will 
continue to consult with State Exchanges to assist with their 
implementation of the coverage month rule under these final 
regulations.
    Finally, the proposed regulations included various applicability 
dates to incorporate existing applicability dates for prior amendments 
to the regulations under section 36B, but all of the amendments under 
Sec. Sec.  1.36B-2 and 1.36B-3 in the proposed regulations

[[Page 102724]]

were proposed to apply on the same date. Those amendments to proposed 
Sec. Sec.  1.36B-2 and 1.36B-3, as finalized in these regulations, all 
apply to taxable years beginning on or after January 1, 2025. Thus, the 
Treasury Department and the IRS do not believe detailed scenarios are 
needed to address the final regulation's applicability date as 
requested by one of the commenters.

V. Conforming Change to the PTC Calculation and Clarification of 
Eligibility

    As noted in Part III of the Background section of this preamble, 
the proposed regulations addressed two items in addition to the change 
to the coverage month definition. First, the proposed regulations 
included a proposed change that would have conformed the calculation of 
the monthly PTC amount under Sec.  1.36B-3(d)(1)(i) with the proposed 
rule allowing certain non-payment months to be coverage months. Under 
the proposed rule, taxpayers would have reduced the amount of the 
enrollment premiums used to compute their monthly PTC by any portion of 
the premium that is unpaid as of the unextended due date of the 
taxpayer's income tax return for the taxable year that includes the 
month. Second, the proposed regulations would have clarified Sec.  
1.36B-2(c)(2)(v) to provide 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. Because no negative comments or suggested changes were 
received with respect to these two items, this Treasury decision adopts 
these amendments without change.

VI. 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.

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 final 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, Premium 
Tax Credit (PTC), which is the sole collection of information 
requirement imposed on individuals by section 36B and the regulations 
under section 36B. The rules in these final regulations will 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 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 final regulations, the change in burden will 
be reflected in the updated burden estimates for Form 8962.
    In addition, Exchanges are required to report to QHP enrollees on 
Form 1095-A certain information the enrollees need to compute the PTC 
allowed for the enrollee and to reconcile the PTC with any APTC paid 
for their coverage. Exchanges must also report this information to the 
IRS. The rules in these final regulations will require the IRS to 
revise the instructions for recipients of Form 1095-A and the 
instructions for Exchanges completing Form 1095-A. 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 1095-A 
will be reflected in the PRA submission associated with Form 1095-A 
under the OMB control number 1545-2232. To the extent there is a change 
in burden because of these final regulations, the change in burden will 
be reflected in the updated burden estimates for Form 1095-A.

III. Regulatory Flexibility Act

    The Treasury Department and the IRS hereby certify that these final 
regulations will not have a significant economic impact on a 
substantial number of small entities pursuant to the Regulatory 
Flexibility Act (5 U.S.C. chapter 6). This certification is based on 
the fact that the majority of the effect of the final regulations falls 
on individual taxpayers, and entities will experience only small 
changes.
    Pursuant to section 7805(f), the notice of proposed rulemaking 
preceding these regulations was submitted to the Chief Counsel for the 
Office of Advocacy of the Small Business Administration for comment on 
their impact on small business, and no comments were received.

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 final 
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 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.

VI. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

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 final regulations is Clara L. Raymond 
of the Office of Associate Chief Counsel (Income Tax and Accounting). 
However, other personnel from the Treasury

[[Page 102725]]

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.

Adoption of Amendments to the Regulations

    Accordingly, the Treasury Department and the IRS amend 26 CFR part 
1 as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by:
0
1. Removing the entry for Sec.  1.36B-0;
0
2. Adding entries in numerical order for Sec. Sec.  1.36B-1 through 
1.36B-3;
0
3. Revising the entries for Sec. Sec.  1.36B-4 and 1.36B-5; and
0
4. Adding an entry in numerical order for Sec.  1.36B-6.
    The additions and revisions read as follows:

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

0
Par. 2. Section 1.36B-0 is amended by:
0
1. Redesignating the entries for Sec.  1.36B-3(c)(4) and Sec.  1.36B-
3(c)(5) as the entries for Sec.  1.36B-3(c)(5) and Sec.  1.36B-3(c)(6), 
respectively; and
0
2. Adding a new entry for Sec.  1.36B-3(c)(4).
    The addition reads as follows:

Sec.  1.36B-0  Table of contents.

* * * * *
    Sec.  1.36B-3 Computing the premium assistance credit amount.
* * * * *
    (c) * * *
    (4) Scenarios for payments sufficient to avoid coverage 
termination.
* * * * *

0
Par. 3. Section 1.36B-2 is amended by:
0
1. Revising the first sentence in paragraph (c)(2)(v);
0
2. Revising paragraph (e)(1); and
0
3. Adding paragraph (e)(6).
    The revisions and addition read as follows:

Sec.  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 January 1, 2025. The 
first sentence of paragraph (c)(2)(v) of this section, as contained in 
26 CFR part 1 edition revised as of April 1, 2024, applies to taxable 
years ending after December 31, 2013, and beginning before January 1, 
2025.

0
Par. 4. Section 1.36B-3 is amended by:
0
1. Revising paragraph (c)(1)(ii);
0
2. Redesignating paragraphs (c)(4) and (5) as paragraphs (c)(5) and 
(6), respectively;
0
3. Adding new paragraph (c)(4); and
0
4. Revising paragraphs (d)(1)(i) and (n).
    The revisions and addition read as follows:

Sec.  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 paid.
* * * * *
    (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 (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 (2) of Sec.  1.36B-3, as 
contained in 26 CFR part 1 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 Sec.  1.36B-3, as contained in 26 CFR 
part 1 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 beginning on or after January 1, 2025. Paragraph (c)(4) of this 
section, as contained in 26 CFR part 1 edition revised as of April 1, 
2024, applies to taxable years beginning after December

[[Page 102726]]

31, 2016, and beginning before January 1, 2025. Paragraph (c)(5) of 
this section, as contained in 26 CFR part 1 edition revised as of April 
1, 2024, applies to taxable years ending after December 31, 2013, and 
beginning before January 1, 2025.
    (4) Paragraph (d)(1)(i) of this section applies to taxable years 
beginning on or after January 1, 2025. Paragraph (d)(1)(i) of Sec.  
1.36B-3, as contained in 26 CFR part 1 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 Sec.  1.36B-3, 
as contained in 26 CFR part 1 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 Sec.  1.36B-3, 
as contained in 26 CFR part 1 edition revised as of April 1, 2024, 
applies to taxable years beginning after December 31, 2022, and 
beginning before January 1, 2025.

Douglas W. O'Donnell,
Deputy Commissioner.
    Approved: December 5, 2024.
Aviva R. Aron-Dine,
Deputy Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2024-29651 Filed 12-17-24; 8:45 am]
BILLING CODE 4830-01-P
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