{"id":8416,"date":"2022-09-06T09:59:57","date_gmt":"2022-09-06T14:59:57","guid":{"rendered":"https:\/\/www.bbrown.com\/insight\/inflation-reduction-act-of-2022-may-indirectly-affect-group-health-plans\/"},"modified":"2022-09-06T09:59:57","modified_gmt":"2022-09-06T14:59:57","slug":"inflation-reduction-act-of-2022-may-indirectly-affect-group-health-plans","status":"publish","type":"insight","link":"https:\/\/www.bbrown.com\/ca\/insight\/inflation-reduction-act-of-2022-may-indirectly-affect-group-health-plans\/","title":{"rendered":"Inflation Reduction Act of 2022 May Indirectly Affect Group Health Plans"},"content":{"rendered":"

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Employee Benefits<\/p>\n

\n Inflation Reduction Act of 2022 May Indirectly Affect Group Health Plans\n <\/h1>\n\t\n <\/div>\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\n\t<\/div>\n\n\t\n[\/vc_column][\/vc_row][vc_row][vc_column width=”2\/3″]\n
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\n Inflation Reduction Act of 2022 May Indirectly Affect Group Health Plans\n <\/h1>\n\t\n <\/div>[vc_column_text]On August 16, 2022, the Inflation Reduction Act of 2022<\/a> (IRA) was signed into law by President Biden. While the Act generally focuses on reducing the federal deficit and various environmental measures, portions of the Act may indirectly impact employer-sponsored health plans.<\/p>\n

Extension of Advanced Premium Tax Credits (APTC) for Individuals Participating in the Health Care Marketplace (Exchange)<\/h3>\n

The parameters for qualifying for the APTC were temporarily expanded under the American Rescue Plan Act (ARPA) beyond 400% of the Federal Poverty Level (for 2021 and 2022). This expansion was extended through the end of the 2025 calendar year under the newly enacted Inflation Reduction Act (IRA). In addition, ARPA and IRA established increased income bands to establish the percentage of household income a taxpayer must pay towards medical premiums to qualify for the APTC. Because of the expansion, there may be greater potential for full-time employees to trigger an Employer Shared Responsibility Payment (play-or-pay penalty) if they forego employer-sponsored coverage or are not offered coverage through an Applicable Large Employer (ALE).<\/p>\n

If the employer does not offer an employee minimum essential health coverage that is affordable and of minimum value and the employee goes to the Exchange and gets the Advanced Premium Tax Credit (APTC), the employer must pay a penalty under Internal Revenue Code (IRC) \u00a74980H.<\/p>\n