8853 / Is a taxpayer eligible for a premium assistance tax credit if he or she is eligible for, or enrolled in, an insurance plan offered through an employer?

Generally, no. According to IRS guidance, a taxpayer is not eligible to receive a premium assistance tax credit even if enrolled in an employer-sponsored plan that is unaffordable or fails to provide minimum value.¹

However, proposed regulations provide that if an individual declines to enroll in employer-sponsored coverage for the year, and does not have an opportunity to enroll in that coverage for one or more succeeding plan years, the individual is treated as ineligible for coverage in the years for which there is no enrollment opportunity (so that he or she will be eligible to claim the premium tax credit). Further, enrollment in an employer-sponsored plan that provides only excepted benefits will not disqualify an individual from receiving the premium tax credit because the individual must also be eligible for minimum essential health coverage (a plan providing only excepted benefits does not qualify as minimum essential coverage).²

Note that if an individual is receiving advance payment of the premium tax credit, he or she will be responsible for notifying the exchange if and when the individual becomes eligible to receive coverage from another source (such as an employer, or through a government sponsored program). Circumstances may exist where the individual notifies the exchange after the time that the exchange can discontinue the advance credit payment for the next month. In this case, the individual will be treated as eligible for the alternative coverage no earlier than the first day of the second month beginning after the month that the individual may enroll in the alternative coverage.³