Modernizing eligibility criteria for insurance affordability programs

(a) Income eligibility determinations for Medicaid and CHIP (1) In general Section 1902(e)(14)(D) of the Social Security Act (42 U.S.C. 1396a(e)(14)(D)) is amended by adding at the end the following new clauses: (vi) SNAP and TANF eligibility findings (I) In general Subject to subclause (III), a State shall provide that an individual for whom a finding has been made as described in clause (II) shall meet applicable eligibility for assistance under the State plan or a waiver of the plan involving financial eligibility, citizenship or satisfactory immigration status, and State residence. A State shall rely on such a finding both for the initial determination of eligibility for medical assistance under the plan or waiver and any subsequent redetermination of eligibility. (II) Findings described A finding described in this subclause is a determination made within a reasonable period (as determined by the Secretary) by a State agency responsible for administering the Temporary Assistance for Needy Families program under part A of title IV or the Supplemental Nutrition Assistance Program established under the Food and Nutrition Act of 2008 that an individual is eligible for benefits under such program. (III) Limitation A State shall be required to rely on the findings of the State agency responsible for administering the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 only in the case of— (aa) an individual who is under 19 years of age; or (bb) an individual who is described in subsection (a)(10)(A)(i)(VIII). (IV) State option A State may rely on the findings of the State agency responsible for administering the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008 in the case of an individual not described in subclause (III). (vii) Recent annual income establishing eligibility (I) In general For purposes of determining the income eligibility for medical assistance of an individual whose eligibility is determined based on the application of modified adjusted gross income under subparagraph (A), a State shall provide that an individual whose eligibility date occurs in January, February, March, or April of a calendar year shall be financially eligible if the individual’s modified adjusted gross income for the preceding calendar year satisfies the income eligibility requirement applicable to the individual. (II) Definition For purposes of this clause, an eligibility date means— (aa) in the case of an individual who is not receiving medical assistance when the individual applies for an insurance affordability program (as defined in section 2 of the Easy Enrollment in Health Care Act), whether such application takes place through section 3(b) of such Act or otherwise, the date on which such individual applies for such program; and (bb) in the case of an individual who is receiving medical assistance and whose continued eligibility for such assistance is being redetermined, the date on which the individual is determined to satisfy all eligibility requirements applicable to the individual other than income eligibility. (III) Rules of construction (aa) Eligibility determinations during May through December Nothing in subclause (I) shall be construed as diminishing, reducing, or otherwise limiting the State’s obligation to grant eligibility, under circumstances other than those described in such subclause, based on data that include income shown on an individual’s tax return, including the obligation under section 1413(c)(3)(A) of the Patient Protection and Affordable Care Act (42 U.S.C. 18083(c)(3)(A)). (bb) Alternative grounds for eligibility Nothing in subclause (I) shall be construed as diminishing, reducing, or otherwise limiting grounds for eligibility other than those described in such subclause, including eligibility based on income as of the point in time at which an application for medical assistance under the State plan or a waiver of the plan is processed. (cc) Qualifying for additional assistance Notwithstanding subclause (I), a State shall use an individual’s modified adjusted gross income as determined as of the point in time at which the individual’s application for medical assistance is processed or, in the case of redetermination of eligibility, projected annual income, to determine the individual’s eligibility for medical assistance if using the individual’s modified adjusted gross income, as so determined, would result in the individual being eligible for greater benefits under the State plan (or a waiver of such plan) or in the imposition of lower premiums or cost-sharing on the individual under the plan (or waiver) than if the individual’s eligibility was determined using the modified adjusted gross income of the individual as shown on the individual’s tax return for the preceding calendar year.. (2) Conforming amendment Section 1902(e)(14)(H)(i) of the Social Security Act (42 U.S.C. 1396a(e)(14)(H)(i)) is amended by inserting except as provided in subparagraph (D)(vii)(I), before the requirement. (3) Effective date The amendments made by this subsection shall take effect on January 1, 2027. (b) Improving the stability and predictability of Exchange coverage (1) Internal Revenue Code of 1986 Section 36B of the Internal Revenue Code of 1986 is amended— (A) in subsection (b)— (i) in paragraph (2)(B)(ii), by striking taxable year and inserting applicable tax year, and (ii) in paragraph (3)— (I) in subparagraph (A)— (aa) in clause (i), by striking taxable year and inserting applicable taxable year, and (bb) in clause (ii)(I), by inserting (or, in the case of applicable taxable years beginning in any calendar year after 2027) after 2014, and (II) in subparagraph (B)— (aa) in clause (ii)(I)(aa), by striking the taxable year each place it appears and inserting the applicable taxable year, and (bb) in the flush matter at the end— (AA) striking files a joint return and no credit is allowed and inserting filed a joint return during the applicable taxable year and no credit was allowed, and (BB) striking unless a deduction is allowed under section 151 for the taxable year and inserting unless a deduction was allowed under section 151 for the applicable taxable year, (B) in subsection (c)— (i) in paragraph (1)— (I) in subparagraphs (A) and (C), by striking taxable year each place it appears and inserting applicable taxable year, and (II) in subparagraph (D), by striking is allowable and all that follows through the period and inserting was allowable to another taxpayer for the applicable taxable year., (ii) in paragraph (2)(C), by adding at the end the following: (v) Time period (I) In general Except as provided under subclause (II), eligibility for minimum essential coverage under this subparagraph shall be based on the individual’s eligibility for employer-sponsored minimum essential coverage during the open enrollment period (or during a special enrollment period for an individual who enrolls or who changes their qualified health plan during a special enrollment period), as determined by the applicable Exchange. (II) Exception An individual shall be considered eligible for minimum essential coverage under clause (iii) for a month for which such Exchange has determined, subject to rights of notice and appeal under laws governing the applicable insurance affordability program (including section 1411(f) of the Patient Protection and Affordable Care Act (42 U.S.C. 18081(f))), that the individual is covered by an eligible employer-sponsored plan., and (iii) by adding at the end the following: (5) Applicable taxable year The term applicable taxable year means— (A) with respect to a coverage month that is January, February, March, April, or May, the most recent taxable year that ended at least 12 months before January 1 of the plan year, and (B) with respect to any coverage month not described in subparagraph (A), the most recent taxable year that ended before January 1 of the plan year. (6) Exchange The term Exchange means an American Health Benefit Exchange established under subtitle D of title I of the Patient Protection and Affordable Care Act (42 U.S.C. 18021 et seq.). (7) Open enrollment period The term open enrollment period means an open enrollment period described in subsection (c)(6)(B) of section 1311 of the Patient Protection and Affordable Care Act (42 U.S.C. 18031)., (C) in subsection (d)— (i) in paragraph (1)— (I) by striking is allowed and inserting was allowed, and (II) by inserting applicable before taxable year, and (ii) in paragraph (3)(B), by inserting applicable before taxable year, (D) in subsection (e)(1)— (i) by striking is allowed and inserting was allowed, and (ii) by inserting applicable before taxable year, and (E) in subsection (f)(2)— (i) in subparagraph (A), by striking If and inserting Except as provided in subparagraphs (B) and (C), if, and (ii) by inserting at the end the following: (C) Safe harbor (i) Income and family size No increase under subparagraph (A) shall be imposed if the advance payments do not exceed amounts that are consistent with income and family size, either— (I) as shown on the return of tax for the applicable plan year, provided such return was accepted by the Secretary as meeting applicable processing criteria, or (II) as determined by the applicable Exchange under subsection (b)(4) of section 1412 of the Patient Protection and Affordable Care Act (42 U.S.C. 18082). (ii) Employer-sponsored minimum essential coverage No increase under subparagraph (A) shall be imposed based on eligibility for minimum essential coverage under subsection (c)(2)(C) if the applicable Exchange— (I) determined, under clause (v)(I) of such subsection, that the individual was ineligible for employer-sponsored minimum essential coverage, and (II) did not determine, under clause (v)(II) of such subsection, that the individual was covered through employer-sponsored minimum essential coverage. (iii) Exception Clauses (i) and (ii) shall not apply to the extent that any determination described in such clauses was based on a false statement by the taxpayer which— (I) was intentional or grossly negligent, and (II) was— (aa) made on a return of tax, or (bb) provided or caused to be provided to an Exchange by the taxpayer.. (2) Patient Protection and Affordable Care Act Section 1412(b) of the Patient Protection and Affordable Care Act (42 U.S.C. 18082(b)) is amended— (A) in paragraph (1)(B), by striking the most recent and all that follows through the period at the end and inserting the applicable taxable year, as defined in section 36B(c)(5) of the Internal Revenue Code of 1986.; (B) in paragraph (2)(B), by striking second preceding taxable year and inserting applicable taxable year, as defined in such section 36B(c)(5); and (C) by adding at the end the following: (3) Change form If, after the submission of an individual’s application form, the individual experiences changes in circumstances as described in paragraph (2), the individual may, by submitting a change form as prescribed by the Secretary, apply for an increased amount of advance payments of the premium tax credit under section 36B of the Internal Revenue Code of 1986, increased cost-sharing reductions under section 1402, increased assistance under the basic health program under section 1331, and coverage through a State Medicaid program or CHIP program. (4) Eligibility for additional assistance (A) In general The Secretary, in consultation with the Secretary of the Treasury, shall establish a process through which— (i) an Exchange determines, through data sources and procedures described in sections 1411 and 1413 (42 U.S.C. 18081; 42 U.S.C. 18083), whether each individual who has submitted a change form under paragraph (3) has experienced substantial changes in circumstances that warrant additional assistance through an insurance affordability program, as defined in section 2 of the Easy Enrollment in Health Care Act; (ii) in the case the Exchange determines an individual has experienced substantial changes in circumstances as described in clause (i), the Exchange conveys such determination to the Secretary of the Treasury under section 36B(f) of the Internal Revenue Code of 1986 and to the administrator of an insurance affordability program for which the individual may qualify under that determination; and (iii) in the case the Exchange determines an individual has experienced substantial changes in circumstances described in clause (i), the individual may qualify without delay for additional advance premium tax credits under section 36B of the Internal Revenue Code of 1986, increased cost-sharing reductions under section 1402, additional basic health program assistance under section 1331, or coverage through a State Medicaid program or CHIP program. (B) Rights to notice and appeal A determination made by an Exchange under this paragraph shall be subject to any applicable rights of notice and appeal, including such rights under section 1411(f).. (3) Effective dates The amendments made by this subsection shall take effect on January 1, 2028, and continue in effect through December 31, 2034.