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H.R. 4723: House considers PPACA tax credit payback bill

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The House is considering H.R. 4723, a bill that would require all public exchange plan advance premium tax credit (APTC) users to pay any extra APTC subsidy money they get back to the government.

House Ways and Means members approved the bill by a vote of 22-15 last week.

Drafters of the Patient Protection and Affordable Care Act (PPACA) created the APTC system to give consumers a way to use tax credits to cut the out-of-pocket cost of PPACA exchange plan premiums while the plan year is still under way.

Consumers estimate what their income will be during the plan year when they apply for the plan, shortly before or shortly after the plan year begins. The Internal Revenue Service (IRS) and the U.S. Department of Health and Human Services (HHS) use the income predictions to estimate how much APTC money the government should send plans for each enrollee.

See also: CMS: has mailed its 1095-As

Federal law already requires an APTC recipient who ends up with income of 400 percent of the federal poverty level or higher to pay all excess APTC subsidy money paid during a plan year back to the government.

Consumers who earn less than 200 percent of the federal poverty level have to pay up to $300 in excess subsidies back if they have single filing status or up to $600 in excess subsidies back if they have another filing status.

The current APTC payback caps are $750 for singles and $1,500 for other filers for consumers with income from 200 percent to 299 percent of the federal poverty level, and $1,250 for singles and $2,500 for other filers for consumers with income from 300 percent to 400 percent of the federal poverty level.

The sponsor of H.R. 4723, Rep. Lynn Jenkins, R-Kan., says all people who get excess subsidy payments should be treated equally.

“It is neither good governance nor fiscally sane to treat folks differently for the same issue,” Jenkins says in a statement about H.R. 4723.

Analysts at the Congressional Budget Office (CBO) say, based on estimates from the Joint Committee on Taxation, that eliminating the APTC payback caps for all filers could decrease outlays by $45.8 billion from 2016 through 2026 and increase revenue by $15.8 billion over that period.

The bill could reduce the federal budget deficit by $61.6 billion, the analysts estimate.

The CBO analysts do not discuss why they are assuming that the government could recover all of the excess APTC money back from taxpayers who earn less than 400 percent of the federal poverty level. The analysts also do not discuss whether any taxpayers have paid excess APTC subsidy money for 2014 or 2015 back to the government.

See also:

Last-minute filers narrow PPACA tax credit reporting gap

What agents have to know about IRS PPACA problems


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