Sponsors (2)
The bill clarifies that catastrophic plans are not eligible for premium tax credits—reducing administrative uncertainty—but it does so at the cost of higher out-of-pocket costs for people who choose or can only access those plans and added compliance burden for insurers and tax administrators.
Taxpayers enrolled in catastrophic plans are explicitly clarified as remaining ineligible for the premium tax credit, reducing uncertainty about tax treatment for those enrollees.
State marketplace administrators and issuers that do not offer plans with optional additional cost-sharing features will not generate tax-credit-eligible plans, which could simplify plan eligibility administration at the marketplace level.
Lower-income individuals who enroll in catastrophic plans will remain ineligible for premium tax credits, increasing their out-of-pocket premium and deductible costs.
People (including some middle-class families) who buy coverage from issuers that do not offer plans with optional cost-sharing features may be blocked from receiving premium tax credits, reducing affordable plan choices for them.
Insurers and the IRS (financial institutions) could face increased complexity and compliance costs to determine which plans and issuers are excluded under the new criteria.
Based on analysis of 2 sections of legislative text.
Clarifies which individual-market plans (catastrophic plans and certain issuer plans lacking cost-sharing option) are excluded from premium tax credit eligibility, effective for tax years after 2026.
Official title: To amend the Internal Revenue Code of 1986 to limit eligibility for the premium tax credit to individuals enrolled in qualified health plans offered by health insurance issuers that offer at least one qualified health plan which provides the option to make monthly cost-sharing payments, and for other purposes.
Introduced June 25, 2026 by Aaron Bean · Last progress June 25, 2026
Amends the federal tax code definition of health plans that are excluded from eligibility for the premium tax credit. The change explicitly limits the exclusion to catastrophic plans under the ACA and to certain qualified health plans offered by issuers that lack at least one plan providing enrollees an option to elect additional cost-sharing features. The change applies to tax years beginning after December 31, 2026. The measure adjusts which individual market plans can make enrollees ineligible for premium tax credits, affecting consumers who shop on the ACA marketplaces, insurers' product offerings, and tax administration for returns claiming the premium tax credit.