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Federal Register / Vol. 86, No. 124 / Thursday, July 1, 2021 / Proposed Rules
enrollment window rules at 155.420b and c, respectively.
We believe that the current special enrollment period rules that reference APTC eligibility at 155.420d6 could permit inconsistent interpretations of what it means to be newly eligible or ineligible for APTC. Exchange regulations at 155.305f1 define tax filers as APTC eligible if their expected household income for the benefit year for which coverage is requested is greater than or equal to 100 percent but not more than 400 percent of the FPL
and they, or their expected tax dependents for the year, 1 meet the requirements for eligibility for enrollment in a QHP through the Exchange; and 2 are not eligible for MEC, with the exception of coverage in the individual market.
IRS rules at 26 CFR 1.36B3 govern the APTC amount an individual may receive once they are found eligible for APTC under 155.420d6. Pursuant to these IRS rules, an Exchange enrollees monthly APTC amount is the excess of the adjusted monthly premium for the applicable benchmark plan 64 over 1/12
of the product of the taxpayers household income and the applicable percentage for the taxable year. Under this formula, if the applicable percentage of 1/12 of a taxpayers estimated annual household income is higher than the adjusted monthly premium of the relevant benchmark plan, a taxpayer will be eligible generally for APTC under 155.305f1, but will qualify for a maximum APTC amount of zero dollars under 26 CFR 1.36B3. Currently, neither 155.305f1 or 26 CFR 1.36B
3 recognize or explain that an individual generally could be APTC
eligible, but not qualify to receive any amount in APTC greater than zero. The current text of 155.420 similarly does not address this issue such that there could exist some ambiguity about what it means to be APTC eligible or ineligible for purposes of the special enrollment periods under 155.420.
We propose to add text to 155.420
to clarify that an individual who qualifies for a maximum APTC amount of zero dollars is considered ineligible for APTC for purposes of the 155.420s special enrollment periods. Specifically, any determination that an individual cannot receive an APTC amount greater than zero dollars is equivalent to being 64 Per
IRS rules at 26 CFR 1.36B3f, the term benchmark plan is generally used to refer to the second lowest-cost silver plan, as described in section 1302d1B of the ACA 42 U.S.C.
18022d1B, offered to the taxpayers coverage family through the Exchange for the rating area where the taxpayer resides.

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found APTC ineligible for purposes of special enrollment period eligibility under 155.420d. We believe this interpretation comports with the perspective of an applicant for Exchange coverage who will take their available financial assistance amount into account when selecting a QHP for the upcoming coverage year and who may wish to change their QHP partway through a coverage year because of a change in their financial assistance.
Because we believe that the current regulation permits this interpretation, but could instead be interpreted to require strict adherence to the listed requirements for APTC eligibility at 155.305f which does not address situations where a consumer meets these requirements but qualifies for a zero dollar APTC amount, we are proposing regulation text to ensure consistent and correct interpretation of what it means to be determined ineligible for APTC. This reading of APTC ineligibility is also consistent with our discussion of the policy in previous rulemaking. For example, in the 2020 Payment Notice final rule,65
we added a new paragraph at 155.420d6v allowing Exchanges to provide a special enrollment period for qualified individuals who experience a decrease in household income and receive a new determination of eligibility for APTC by an Exchange, and who had MEC for one or more days during the 60 days preceding the financial change.
We believe that this clarification should also apply to special enrollment periods provided in 155.420d6iii through v, which include special enrollment periods for individuals who become newly eligible for APTC.
Section 155.420d6iii provides a special enrollment period for individuals who are enrolled in an employer-sponsored plan, and who are determined newly eligible for APTC, in part, because they are no longer eligible for qualifying coverage in an eligibleemployer sponsored plan in accordance with 26 CFR 1.36B2c3 for example, because their employer changed the coverage, and who are allowed to terminate their employer-sponsored coverage. We do not expect that this special enrollment period would be helpful to individuals who qualify for a maximum APTC amount of zero dollars because they would not receive assistance to help pay for monthly QHP
premiums. Further, it likely would not benefit individuals currently enrolled in employer-sponsored coverage to change to a QHP without the benefit of an 65 84

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APTC dollar amount greater than zero, in part because changing plans in the middle of the plan year would cause their deductible and other accumulators to be reset. We seek comments on this proposal.
We believe that this clarification will be especially helpful in light of the removal of the upper APTC eligibility limit on household income at 400
percent of the FPL for taxable years 2021 and 2022 under the ARP.66 This is because, with this change, any applicants with household incomes over 400 percent of the FPL may be eligible for APTC, more consumers likely will qualify for APTC technically, but for an APTC amount of zero dollars. This clarification ensures that special enrollment period regulations clearly reflect that enrollees for whom this is the case may qualify for a special enrollment period based on a decrease in their household income, or any other change that makes them newly eligible for an APTC amount of greater than zero dollars.
Additionally, this clarification is important because it helps ensure transparency in terms of why enrollees in certain situations that appear similar would not both qualify for one of the special enrollment periods at 155.420d6. For example, the new affordability provisions in the ARP
allow for a situation where an enrollee with a household income above 400
percent of the FPL is newly determined to qualify for an APTC amount of zero dollars as opposed to APTC-ineligible simply by virtue of exceeding the household income limit, while another enrollee with a household income above 400 percent of the FPL who is residing in a different service area is newly determined eligible for an APTC amount of more than zero dollars based on the cost of their benchmark plan.67 Both enrollees have received new determinations of APTC eligibility based just being enrolled in Exchange coverage and not having another offer of MEC, but only the latter enrollee who is determined eligible for an APTC amount of greater than zero dollars is intended to be eligible for the special enrollment periods at 155.420d6. We believe the proposed new language provides needed clarity regarding the eligibility parameters of this special enrollment period to enrollees, particularly 66 Public
Law 1172.
Exchanges on the Federal platform, where most ARP changes to APTC eligibility were implemented on April 1, 2021, enrollees in this situation could change their QHP coverage through the 2021 special enrollment period; however, this enrollment window was not available through all Exchanges.
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