To amend a longstanding regulation regarding premium tax credits (PTCs) through the Affordable Care Act (ACA) marketplace,
or exchange, Treasury and the Internal Revenue Service have proposed amendments. Currently under the Affordable Care Act,
workers and their dependents are ineligible for PTCs when they have "affordable"
employer-sponsored insurance (ESI) that offers at least "minimum value." In an April 7, 2022 Federal Register notice,
the agencies propose a new affordability test for dependents of workers with employer-sponsored insurance,
stating that they have "tentatively determined" that the existing rule "is not required by the relevant statutes."
The newly proposed affordability test is unconstitutional. There is one lawful affordability test for those with an offer of ESI,
and it applies to both workers and their dependents: if a worker must pay more than 9.5
percent of household income for self-only coverage, she and her dependents qualify for PTCs.
The agencies provide a flawed rationale for legislating a new affordability test for dependents,
confusing an exemption from the ACA's tax penalty on the uninsured with an entitlement to tax credits.
Since the passage of the ACA in 2010, the agencies have consistently rejected the tortured misinterpretation of
the statute that they now promote. Finalized in 2013, the existing rule interprets the law correctly;
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