Individuals who enroll in qualified health plans (QHPs) through the exchanges and claim the premium tax credit.

The exchanges that make available QHPs to individuals and employers.

Is affordable to the employee.

Provides minimum value, which means the plan's share of the total allowed costs of benefits provided under the plan is at least 60%.

Information provided about affordability. Under a regulatory safe harbor, an employer-sponsored plan is unaffordable for an employee for a plan year if:

Individuals who apply for advance payment of the premium tax credit must provide the exchange with information on whether employer-sponsored coverage is available to them. Under the final regulations, the safe harbor:

Duration of affordability safe harbor. Under the final regulations, the affordability safe harbor applies until the availability of employer-sponsored coverage changes. To extend the safe harbor in the event that new or different employer-sponsored coverage becomes available after the individual enrolls in a QHP, the individual must:

Eligibility for government-sponsored minimum essential coverage. An individual is allowed a premium tax credit for a particular month if, among other things, the individual is not eligible for minimum essential coverage, which is defined to include government-sponsored programs such as Medicare or Medicaid. The final regulations extend the timing rule under the proposed regulations for when an individual is treated as eligible for a government-sponsored program. Under the final regulations, an individual who does not complete the requirements for receiving benefits under a government-sponsored program by the last day of the third full calendar month after the event that establishes eligibility is regarded as eligible for the coverage on the first day of the fourth calendar month.

Definition of federal poverty line. The definition of federal poverty line now includes a rule that applies if:

The final regulations clarify that the higher of the federal poverty lines will apply in these situations.

Impact of automatic enrollment. The final regulations address commenters' concerns that an individual could be automatically enrolled for minimum essential coverage under an employer-sponsored plan that is unaffordable or does not provide minimum value, and become ineligible for the premium tax credit. Automatic enrollment could occur:

Under the final regulations, an employee is generally not treated as enrolled in an employer-sponsored plan year if the employee:

Wellness incentives and Health Reimbursement Arrangements (HRAs). Commenters sought clarification on how wellness incentives impact the premium affordability determination. The final regulations suggest that additional guidance will address how the affordability of employer-sponsored coverage reflects:

Eligibility for minimum essential coverage. An individual who enrolls in an employer-sponsored plan is generally ineligible for the premium tax credit even if the plan:

Addressing the duration of this ineligibility (for example, where an individual terminates coverage during a plan year), the final regulations clarify that an individual is regarded as eligible for minimum essential coverage under an employer-sponsored plan by enrolling in the plan or continuation coverage only for months the individual is enrolled in the coverage.

Married taxpayers filing separately. Married couples that fail to file a joint return are not allowed a premium tax credit. Also, if a married couple receives advance credit payments but does not file a joint return, they must repay the advance payments. The final regulations do not include special rules for individuals who receive advance payments but face difficulties in satisfying the joint return requirement (for example, because of a pending divorce or domestic abuse). However, the IRS indicated that it will propose additional guidance addressing this situation.