Specifies that the credit is the lesser of the monthly premiums for 1 or more QHPs offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse or any dependent or the excess (if any) over the adjusted monthly premium for the applicable second-lowest-cost silver plan as specified by an “applicable percentage” of monthly household income – based on the Federal Poverty Level (FPL) – on a sliding scale between 2 percent (up to 133 percent FPL) to 9.5 percent (400 percent FPL).
Provides for indexing of the applicable percentages of taxpayers’ household income starting in 2015 to reflect the excess of the rate of premium growth over the rate of income growth for the preceding calendar year, as well as for an additional adjustment starting in 2019 based on the excess (if any) of the rate of premium growth estimated under indexing over the rate of growth in the consumer price index. Provides for a failsafe if the aggregate amount of premium tax credits under this section and cost-sharing reductions under section 1402 exceeds 0.504 percent of GDP.
Defines adjusted monthly premium – adjusted for age – that is considered for premium tax credit purposes and specifies that if a State requires additional benefits beyond essential health benefits, the portion of the premium allocable to such additional benefits is not taken into account in determining either the monthly premium or the adjusted monthly premium under this section. Provides that employees can receive premium tax credits even if they are eligible for employer-sponsored coverage if their contribution to that coverage exceeds 9.5 percent of their household income or if the employer-sponsored coverage does not provide minimum value, defined as an actuarial value of at least 60 percent. Includes provisions regarding the reconciliation of the credit and advance credit as well as any excess payments. Requires a GAO report within 5 years on issues including the impact of the tax credit on maintaining and expanding coverage.
Effective for taxable years ending after December 31, 2013.