42 U.S.C. § 18071 — Reduced cost-sharing for individuals en-

Page 9127 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18071 1 So in original. Probably should be followed by ‘‘be’’. 2 So in original. Probably should be ‘‘sections’’. the target amount, the plan shall pay to the Secretary an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of the excess of 92 percent of the target amount over the allowable costs. (c) Definitions In this section: (1) Allowable costs (A) In general The amount of allowable costs of a plan for any year is an amount equal to the total costs (other than administrative costs) of the plan in providing benefits covered by the plan. (B) Reduction for risk adjustment and rein- surance payments Allowable costs shall 1 reduced by any risk adjustment and reinsurance payments re- ceived under section 2 18061 and 18063 of this title. (2) Target amount The target amount of a plan for any year is an amount equal to the total premiums (in- cluding any premium subsidies under any gov- ernmental program), reduced by the adminis- trative costs of the plan. (Pub. L. 111–148, title I, § 1342, Mar. 23, 2010, 124 Stat. 211.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in subsec. (a), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Part D of title XVIII of the Act is classified generally to part D (§ 1395w–101 et seq.) of subchapter XVIII of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables. § 18063. Risk adjustment (a) In general (1) Low actuarial risk plans Using the criteria and methods developed under subsection (b), each State shall assess a charge on health plans and health insurance issuers (with respect to health insurance cov- erage) described in subsection (c) if the actu- arial risk of the enrollees of such plans or cov- erage for a year is less than the average actu- arial risk of all enrollees in all plans or cov- erage in such State for such year that are not self-insured group health plans (which are sub- ject to the provisions of the Employee Retire- ment Income Security Act of 1974 [29 U.S.C. 1001 et seq.]). (2) High actuarial risk plans Using the criteria and methods developed under subsection (b), each State shall provide a payment to health plans and health insur- ance issuers (with respect to health insurance coverage) described in subsection (c) if the ac- tuarial risk of the enrollees of such plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Re- tirement Income Security Act of 1974). (b) Criteria and methods The Secretary, in consultation with States, shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section. The Secretary may utilize criteria and methods similar to the criteria and methods utilized under part C or D of title XVIII of the Social Security Act [42 U.S.C. 1395w–21 et seq., 1395w–101 et seq.]. Such criteria and meth- ods shall be included in the standards and re- quirements the Secretary prescribes under sec- tion 18041 of this title. (c) Scope A health plan or a health insurance issuer is described in this subsection if such health plan or health insurance issuer provides coverage in the individual or small group market within the State. This subsection shall not apply to a grandfathered health plan or the issuer of a grandfathered health plan with respect to that plan. (Pub. L. 111–148, title I, § 1343, Mar. 23, 2010, 124 Stat. 212.) Editorial Notes REFERENCES IN TEXT The Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, which is classified principally to chapter 18 (§ 1001 et seq.) of Title 29, Labor. For com- plete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Ta- bles. The Social Security Act, referred to in subsec. (b), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Parts C and D of title XVIII of the Act are classified generally to parts C (§ 1395w–21 et seq.) and D (§ 1395w–101 et seq.), respec- tively, of subchapter XVIII of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables. SUBCHAPTER IV—AFFORDABLE COVERAGE CHOICES FOR ALL AMERICANS PART A—PREMIUM TAX CREDITS AND COST- SHARING REDUCTIONS § 18071. Reduced cost-sharing for individuals en- rolling in qualified health plans (a) In general In the case of an eligible insured enrolled in a qualified health plan— (1) the Secretary shall notify the issuer of the plan of such eligibility; and (2) the issuer shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c). (b) Eligible insured In this section, the term ‘‘eligible insured’’ means an individual— (1) who enrolls in a qualified health plan in the silver level of coverage in the individual market offered through an Exchange; and (2) whose household income exceeds 100 per- cent but does not exceed 400 percent of the poverty line for a family of the size involved. Page 9128 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18071 1 So in original. Probably should be ‘‘out-of-pocket’’. 2 So in original. Probably should be ‘‘18031(d)(3)(B)(ii)(I)’’. In the case of an individual described in section 36B(c)(1)(B) of title 26, the individual shall be treated as having household income equal to 100 percent for purposes of applying this section. (c) Determination of reduction in cost-sharing (1) Reduction in out-of-pocket limit (A) In general The reduction in cost-sharing under this subsection shall first be achieved by reduc- ing the applicable out-of pocket 1 limit under section 18022(c)(1) of this title in the case of— (i) an eligible insured whose household income is more than 100 percent but not more than 200 percent of the poverty line for a family of the size involved, by two- thirds; (ii) an eligible insured whose household income is more than 200 percent but not more than 300 percent of the poverty line for a family of the size involved, by one- half; and (iii) an eligible insured whose household income is more than 300 percent but not more than 400 percent of the poverty line for a family of the size involved, by one- third. (B) Coordination with actuarial value limits (i) In general The Secretary shall ensure the reduction under this paragraph shall not result in an increase in the plan’s share of the total al- lowed costs of benefits provided under the plan above— (I) 94 percent in the case of an eligible insured described in paragraph (2)(A); (II) 87 percent in the case of an eligible insured described in paragraph (2)(B); (III) 73 percent in the case of an eligi- ble insured whose household income is more than 200 percent but not more than 250 percent of the poverty line for a fam- ily of the size involved; and (IV) 70 percent in the case of an eligi- ble insured whose household income is more than 250 percent but not more than 400 percent of the poverty line for a fam- ily of the size involved. (ii) Adjustment The Secretary shall adjust the out-of pocket 1 limits under paragraph (1) if nec- essary to ensure that such limits do not cause the respective actuarial values to exceed the levels specified in clause (i). (2) Additional reduction for lower income in- sureds The Secretary shall establish procedures under which the issuer of a qualified health plan to which this section applies shall further reduce cost-sharing under the plan in a man- ner sufficient to— (A) in the case of an eligible insured whose household income is not less than 100 per- cent but not more than 150 percent of the poverty line for a family of the size involved, increase the plan’s share of the total allowed costs of benefits provided under the plan to 94 percent of such costs; (B) in the case of an eligible insured whose household income is more than 150 percent but not more than 200 percent of the poverty line for a family of the size involved, in- crease the plan’s share of the total allowed costs of benefits provided under the plan to 87 percent of such costs; and (C) in the case of an eligible insured whose household income is more than 200 percent but not more than 250 percent of the poverty line for a family of the size involved, in- crease the plan’s share of the total allowed costs of benefits provided under the plan to 73 percent of such costs. (3) Methods for reducing cost-sharing (A) In general An issuer of a qualified health plan mak- ing reductions under this subsection shall notify the Secretary of such reductions and the Secretary shall make periodic and time- ly payments to the issuer equal to the value of the reductions. (B) Capitated payments The Secretary may establish a capitated payment system to carry out the payment of cost-sharing reductions under this section. Any such system shall take into account the value of the reductions and make appro- priate risk adjustments to such payments. (4) Additional benefits If a qualified health plan under section 18022(b)(5) of this title offers benefits in addi- tion to the essential health benefits required to be provided by the plan, or a State requires a qualified health plan under section 18031(d)(3)(B) of this title to cover benefits in addition to the essential health benefits re- quired to be provided by the plan, the reduc- tions in cost-sharing under this section shall not apply to such additional benefits. (5) Special rule for pediatric dental plans If an individual enrolls in both a qualified health plan and a plan described in section 18031(d)(2)(B)(ii)(I) 2 of this title for any plan year, subsection (a) shall not apply to that portion of any reduction in cost-sharing under subsection (c) that (under regulations pre- scribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a qualified health plan under sec- tion 18022(b)(1)(J) of this title. (d) Special rules for Indians (1) Indians under 300 percent of poverty If an individual enrolled in any qualified health plan in the individual market through an Exchange is an Indian (as defined in section 5304(d) of title 25) whose household income is not more than 300 percent of the poverty line for a family of the size involved, then, for pur- poses of this section— (A) such individual shall be treated as an eligible insured; and Page 9129 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18071 (B) the issuer of the plan shall eliminate any cost-sharing under the plan. (2) Items or services furnished through Indian health providers If an Indian (as so defined) enrolled in a qualified health plan is furnished an item or service directly by the Indian Health Service, an Indian Tribe, Tribal Organization, or Urban Indian Organization or through referral under contract health services— (A) no cost-sharing under the plan shall be imposed under the plan for such item or service; and (B) the issuer of the plan shall not reduce the payment to any such entity for such item or service by the amount of any cost- sharing that would be due from the Indian but for subparagraph (A). (3) Payment The Secretary shall pay to the issuer of a qualified health plan the amount necessary to reflect the increase in actuarial value of the plan required by reason of this subsection. (e) Rules for individuals not lawfully present (1) In general If an individual who is an eligible insured is not lawfully present— (A) no cost-sharing reduction under this section shall apply with respect to the indi- vidual; and (B) for purposes of applying this section, the determination as to what percentage a taxpayer’s household income bears to the poverty level for a family of the size in- volved shall be made under one of the fol- lowing methods: (i) A method under which— (I) the taxpayer’s family size is deter- mined by not taking such individuals into account, and (II) the taxpayer’s household income is equal to the product of the taxpayer’s household income (determined without regard to this subsection) and a frac- tion— (aa) the numerator of which is the poverty line for the taxpayer’s family size determined after application of subclause (I), and (bb) the denominator of which is the poverty line for the taxpayer’s family size determined without regard to sub- clause (I). (ii) A comparable method reaching the same result as the method under clause (i). (2) Lawfully present For purposes of this section, an individual shall be treated as lawfully present only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the cost-sharing reduction under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. (3) Secretarial authority The Secretary, in consultation with the Sec- retary of the Treasury, shall prescribe rules setting forth the methods by which calcula- tions of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section. (f) Special rule for individuals who receive un- employment compensation during 2021 For purposes of this section, in the case of an individual who has received, or has been ap- proved to receive, unemployment compensation for any week beginning during 2021, for the plan year in which such week begins— (1) such individual shall be treated as meet- ing the requirements of subsection (b)(2), and (2) for purposes of subsections (c) and (d), there shall not be taken into account any household income of the individual in excess of 133 percent of the poverty line for a family of the size involved. (g) Definitions and special rules In this section: (1) In general Any term used in this section which is also used in section 36B of title 26 shall have the meaning given such term by such section. (2) Limitations on reduction No cost-sharing reduction shall be allowed under this section with respect to coverage for any month unless the month is a coverage month with respect to which a credit is al- lowed to the insured (or an applicable tax- payer on behalf of the insured) under section 36B of such title. (3) Data used for eligibility Any determination under this section shall be made on the basis of the taxable year for which the advance determination is made under section 18082 of this title and not the taxable year for which the credit under sec- tion 36B of title 26 is allowed. (Pub. L. 111–148, title I, § 1402, Mar. 23, 2010, 124 Stat. 220; Pub. L. 111–152, title I, § 1001(b), Mar. 30, 2010, 124 Stat. 1031; Pub. L. 117–2, title II, § 2305(a), Mar. 11, 2021, 135 Stat. 39.) Editorial Notes AMENDMENTS 2021—Subsecs. (f), (g). Pub. L. 117–2 added subsec. (f) and redesignated former subsec. (f) as (g). 2010—Subsec. (c)(1)(B)(i)(I). Pub. L. 111–152, § 1001(b)(1)(A), substituted ‘‘94’’ for ‘‘90’’. Subsec. (c)(1)(B)(i)(II). Pub. L. 111–152, § 1001(b)(1)(B)(i), substituted ‘‘87’’ for ‘‘80’’. Subsec. (c)(1)(B)(i)(III), (IV). Pub. L. 111–152, § 1001(b)(1)(B)(ii), (C), added subcls. (III) and (IV) and struck out former subcl. (III). Prior to amendment, subcl. (III) read as follows: ‘‘70 percent in the case of an eligible insured described in clause (ii) or (iii) of sub- paragraph (A).’’ Subsec. (c)(2)(A). Pub. L. 111–152, § 1001(b)(2)(A)(i), sub- stituted ‘‘94’’ for ‘‘90’’. Subsec. (c)(2)(B). Pub. L. 111–152, § 1001(b)(2)(B)(i), sub- stituted ‘‘87’’ for ‘‘80’’. Subsec. (c)(2)(C). Pub. L. 111–152, § 1001(b)(2)(A)(ii), (B)(ii), (C), added subpar. (C). Page 9130 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18081 1 See References in Text note below. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Pub. L. 117–2, title II, § 2305(b), Mar. 11, 2021, 135 Stat. 40, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to plan years beginning after December 31, 2020.’’ PART B—ELIGIBILITY DETERMINATIONS § 18081. Procedures for determining eligibility for Exchange participation, premium tax credits and reduced cost-sharing, and indi- vidual responsibility exemptions (a) Establishment of program The Secretary shall establish a program meet- ing the requirements of this section for deter- mining— (1) whether an individual who is to be cov- ered in the individual market by a qualified health plan offered through an Exchange, or who is claiming a premium tax credit or re- duced cost-sharing, meets the requirements of sections 18032(f)(3), 18071(e), and 18082(d) of this title and section 36B(e) of title 26 that the in- dividual be a citizen or national of the United States or an alien lawfully present in the United States; (2) in the case of an individual claiming a premium tax credit or reduced cost-sharing under section 36B of title 26 or section 18071 of this title— (A) whether the individual meets the in- come and coverage requirements of such sec- tions; and (B) the amount of the tax credit or reduced cost-sharing; (3) whether an individual’s coverage under an employer-sponsored health benefits plan is treated as unaffordable under sections 36B(c)(2)(C) and 5000A(e)(2) of title 26; 1 and (4) whether to grant a certification under section 18031(d)(4)(H) of this title attesting that, for purposes of the individual responsi- bility requirement under section 5000A of title 26, an individual is entitled to an exemption from either the individual responsibility re- quirement or the penalty imposed by such sec- tion. (b) Information required to be provided by appli- cants (1) In general An applicant for enrollment in a qualified health plan offered through an Exchange in the individual market shall provide— (A) the name, address, and date of birth of each individual who is to be covered by the plan (in this subsection referred to as an ‘‘enrollee’’); and (B) the information required by any of the following paragraphs that is applicable to an enrollee. (2) Citizenship or immigration status The following information shall be provided with respect to every enrollee: (A) In the case of an enrollee whose eligi- bility is based on an attestation of citizen- ship of the enrollee, the enrollee’s social se- curity number. (B) In the case of an individual whose eli- gibility is based on an attestation of the en- rollee’s immigration status, the enrollee’s social security number (if applicable) and such identifying information with respect to the enrollee’s immigration status as the Secretary, after consultation with the Sec- retary of Homeland Security, determines ap- propriate. (3) Eligibility and amount of tax credit or re- duced cost-sharing In the case of an enrollee with respect to whom a premium tax credit or reduced cost- sharing under section 36B of title 26 or section 18071 of this title is being claimed, the fol- lowing information: (A) Information regarding income and family size The information described in section 6103(l)(21) of title 26 1 for the taxable year ending with or within the second calendar year preceding the calendar year in which the plan year begins. (B) Certain individual health insurance poli- cies obtained through small employers The amount of the enrollee’s permitted benefit (as defined in section 9831(d)(3)(C) of title 26) under a qualified small employer health reimbursement arrangement (as de- fined in section 9831(d)(2) of such title). (C) Changes in circumstances The information described in section 18082(b)(2) of this title, including informa- tion with respect to individuals who were not required to file an income tax return for the taxable year described in subparagraph (A) or individuals who experienced changes in marital status or family size or signifi- cant reductions in income. (4) Employer-sponsored coverage In the case of an enrollee with respect to whom eligibility for a premium tax credit under section 36B of title 26 or cost-sharing re- duction under section 18071 of this title is being established on the basis that the enroll- ee’s (or related individual’s) employer is not treated under section 36B(c)(2)(C) of title 26 as providing minimum essential coverage or af- fordable minimum essential coverage, the fol- lowing information: (A) The name, address, and employer iden- tification number (if available) of the em- ployer. (B) Whether the enrollee or individual is a full-time employee and whether the em- ployer provides such minimum essential cov- erage. (C) If the employer provides such min- imum essential coverage, the lowest cost op- tion for the enrollee’s or individual’s enroll- ment status and the enrollee’s or individ- ual’s required contribution (within the meaning of section 5000A(e)(1)(B) of title 26) under the employer-sponsored plan. (D) If an enrollee claims an employer’s minimum essential coverage is unaffordable, the information described in paragraph (3).