PRIA, Government Policy, Made Personal

Summary

If you buy a Silver health plan through an Exchange and your household income is more than 100% but not more than 400% of the poverty line, the government will tell your insurer you qualify and the insurer must lower how much you pay when you get care. The plan’s out-of-pocket limit is cut first: by two‑thirds if income is more than 100% up to 200% of poverty, by one‑half if more than 200% up to 300%, and by one‑third if more than 300% up to 400%. The rule also makes sure the plan’s share of total allowed costs ends up near set targets: 94% for 100–150% of poverty, 87% for 150–200%, 73% for 200–250%, and 70% for 250–400%. The government may adjust limits so those targets are met. The insurer must tell the government what cost cuts it gives, and the government will pay the insurer the value of those cuts. Reductions do not apply to benefits beyond the required basic benefits, and a separate pediatric dental plan may be treated differently. American Indians with income at or below 300% of poverty are treated as eligible and have cost‑sharing removed; services given directly by Indian health providers have no cost‑sharing and insurers can’t lower payments to those providers because of it. People who are not lawfully present do not get these reductions. For plan years where someone got unemployment in 2021, they count as meeting the income rule and their income is capped at 133% of poverty when applying the reductions. Months only count if the person also qualifies for a premium tax credit.

Title 42, §18071

The Public Health and Welfare, Source: USLM XML via OLRC

(a)In general

In the case of an eligible insured enrolled in a qualified health plan—

(1)the Secretary shall notify the issuer of the plan of such eligibility; and

(2)the issuer shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c).

(b)Eligible insured

In this section, the term “eligible insured” means an individual—

(1)who enrolls in a qualified health plan in the silver level of coverage in the individual market offered through an Exchange; and

(2)whose household income exceeds 100 percent but does not exceed 400 percent of the poverty line for a family of the size involved.

In the case of an individual described in section 36B(c)(1)(B) of title 26, the individual shall be treated as having household income equal to 100 percent for purposes of applying this section.

(c)Determination of reduction in cost-sharing

(1)Reduction in out-of-pocket limit

(A)In general

The reduction in cost-sharing under this subsection shall first be achieved by reducing the applicable out-of pocket limit under section 18022(c)(1) of this title in the case of— (i)

(ii)an eligible insured whose household income is more than 200 percent but not more than 300 percent of the poverty line for a family of the size involved, by one-half; and

(iii)an eligible insured whose household income is more than 300 percent but not more than 400 percent of the poverty line for a family of the size involved, by one-third.

(B)Coordination with actuarial value limits

(i)In general

The Secretary shall ensure the reduction under this paragraph shall not result in an increase in the plan’s share of the total allowed costs of benefits provided under the plan above—

(I)94 percent in the case of an eligible insured described in paragraph (2)(A);

(II)87 percent in the case of an eligible insured described in paragraph (2)(B);

(III)73 percent in the case of an eligible insured whose household income is more than 200 percent but not more than 250 percent of the poverty line for a family of the size involved; and

(IV)70 percent in the case of an eligible insured whose household income is more than 250 percent but not more than 400 percent of the poverty line for a family of the size involved.

(ii)Adjustment

The Secretary shall adjust the out-of pocket 1 limits under paragraph (1) if necessary to ensure that such limits do not cause the respective actuarial values to exceed the levels specified in clause (i).

(2)Additional reduction for lower income insureds

The Secretary shall establish procedures under which the issuer of a qualified health plan to which this section applies shall further reduce cost-sharing under the plan in a manner sufficient to—

(A)in the case of an eligible insured whose household income is not less than 100 percent but not more than 150 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of benefits provided under the plan to 94 percent of such costs;

(B)in the case of an eligible insured whose household income is more than 150 percent but not more than 200 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of benefits provided under the plan to 87 percent of such costs; and

(C)in the case of an eligible insured whose household income is more than 200 percent but not more than 250 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of benefits provided under the plan to 73 percent of such costs.

(3)Methods for reducing cost-sharing

(A)In general

An issuer of a qualified health plan making reductions under this subsection shall notify the Secretary of such reductions and the Secretary shall make periodic and timely payments to the issuer equal to the value of the reductions.

(B)Capitated payments

The Secretary may establish a capitated payment system to carry out the payment of cost-sharing reductions under this section. Any such system shall take into account the value of the reductions and make appropriate risk adjustments to such payments.

(4)Additional benefits

If a qualified health plan under section 18022(b)(5) of this title offers benefits in addition to the essential health benefits required to be provided by the plan, or a State requires a qualified health plan under section 18031(d)(3)(B) of this title to cover benefits in addition to the essential health benefits required to be provided by the plan, the reductions in cost-sharing under this section shall not apply to such additional benefits.

(5)Special rule for pediatric dental plans

If an individual enrolls in both a qualified health plan and a plan described in section 18031(d)(2)(B)(ii)(I) of this title for any plan year, subsection (a) shall not apply to that portion of any reduction in cost-sharing under subsection (c) that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a qualified health plan under section 18022(b)(1)(J) of this title.

(d)Special rules for Indians

(1)Indians under 300 percent of poverty

If an individual enrolled in any qualified health plan in the individual market through an Exchange is an Indian (as defined in section 5304(d) of title 25) whose household income is not more than 300 percent of the poverty line for a family of the size involved, then, for purposes of this section— (A)

(B)the issuer of the plan shall eliminate any cost-sharing under the plan.

(2)Items or services furnished through Indian health providers

If an Indian (as so defined) enrolled in a qualified health plan is furnished an item or service directly by the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization or through referral under contract health services—

(A)no cost-sharing under the plan shall be imposed under the plan for such item or service; and

(B)the issuer of the plan shall not reduce the payment to any such entity for such item or service by the amount of any cost-sharing that would be due from the Indian but for subparagraph (A).

(3)Payment

The Secretary shall pay to the issuer of a qualified health plan the amount necessary to reflect the increase in actuarial value of the plan required by reason of this subsection.

(e)Rules for individuals not lawfully present

(1)In general

If an individual who is an eligible insured is not lawfully present—

(A)no cost-sharing reduction under this section shall apply with respect to the individual; and

(B)for purposes of applying this section, the determination as to what percentage a taxpayer’s household income bears to the poverty level for a family of the size involved shall be made under one of the following methods:

(i)A method under which—

(I)the taxpayer’s family size is determined by not taking such individuals into account, and

(II)the taxpayer’s household income is equal to the product of the taxpayer’s household income (determined without regard to this subsection) and a fraction—

(aa)the numerator of which is the poverty line for the taxpayer’s family size determined after application of subclause (I), and

(bb)the denominator of which is the poverty line for the taxpayer’s family size determined without regard to subclause (I).

(ii)A comparable method reaching the same result as the method under clause (i).

(2)Lawfully present

For purposes of this section, an individual shall be treated as lawfully present only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the cost-sharing reduction under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States.

(3)Secretarial authority

The Secretary, in consultation with the Secretary of the Treasury, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section.

(f)Special rule for individuals who receive unemployment compensation during 2021

For purposes of this section, in the case of an individual who has received, or has been approved to receive, unemployment compensation for any week beginning during 2021, for the plan year in which such week begins—

(1)such individual shall be treated as meeting the requirements of subsection (b)(2), and

(2)for purposes of subsections (c) and (d), there shall not be taken into account any household income of the individual in excess of 133 percent of the poverty line for a family of the size involved.

(g)Definitions and special rules

In this section: (1) In general

(2)Limitations on reduction

No cost-sharing reduction shall be allowed under this section with respect to coverage for any month unless the month is a coverage month with respect to which a credit is allowed to the insured (or an applicable taxpayer on behalf of the insured) under section 36B of such title.

(3)Data used for eligibility

Any determination under this section shall be made on the basis of the taxable year for which the advance determination is made under section 18082 of this title and not the taxable year for which the credit under section 36B of title 26 is allowed.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2021—Subsecs. (f), (g). Pub. L. 117–2 added subsec. (f) and redesignated former subsec. (f) as (g). 2010—Subsec. (c)(1)(B)(i)(I). Pub. L. 111–152, § 1001(b)(1)(A), substituted “94” for “90”. Subsec. (c)(1)(B)(i)(II). Pub. L. 111–152, § 1001(b)(1)(B)(i), substituted “87” for “80”. Subsec. (c)(1)(B)(i)(III), (IV). Pub. L. 111–152, § 1001(b)(1)(B)(ii), (C), added subcls. (III) and (IV) and struck out former subcl. (III). Prior to amendment, subcl. (III) read as follows: “70 percent in the case of an eligible insured described in clause (ii) or (iii) of subparagraph (A).” Subsec. (c)(2)(A). Pub. L. 111–152, § 1001(b)(2)(A)(i), substituted “94” for “90”. Subsec. (c)(2)(B). Pub. L. 111–152, § 1001(b)(2)(B)(i), substituted “87” for “80”. Subsec. (c)(2)(C). Pub. L. 111–152, § 1001(b)(2)(A)(ii), (B)(ii), (C), added subpar. (C).

Statutory Notes and Related Subsidiaries

Effective Date

of 2021 Amendment Pub. L. 117–2, title II, § 2305(b), Mar. 11, 2021, 135 Stat. 40, provided that: “The amendment made by this section [amending this section] shall apply to plan years beginning after December 31, 2020.”

§18071 Reduced Cost-sharing for Individuals Enrolling in Qualified Health Plans