# Bulletin No. 2022–17

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Abe611c0985936ffe

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2022–17
April 25, 2022

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

INCOME TAX
REG-114339-21, page 1030.
These proposed regulations under section 36B of the
Internal Revenue Code would amend the existing regulations regarding eligibility for the premium tax credit to provide that affordability of employer-sponsored

Finding Lists begin on page ii.

minimum essential coverage for family members of an
employee is determined based on the employee’s share
of the cost of covering the employee and those family
members, not the cost of covering only the employee.
The proposed regulations also would add a minimum
value rule for family members of employees based on
the benefits provided to the family members.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

April 25, 2022 

Bulletin No. 2022–17

Part IV
Notice of Proposed
Rulemaking

Monday, June 13, 2022. If no outlines are
received by Monday, June 13, 2022, the
public hearing will be cancelled.

Affordability of Employer
Coverage for Family
Members of Employees

ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic submissions via the Federal eRulemaking Portal
at www.regulations.gov (indicate IRS and
REG-114339-21) by following the online
instructions for submitting comments.
Once submitted to the Federal eRulemaking Portal, comments cannot be edited
or withdrawn. The IRS expects to have
limited personnel available to process
public comments that are submitted on
paper through mail. Until further notice,
any comments submitted on paper will be
considered to the extent practicable. The
Department of the Treasury (“Treasury
Department”) and the IRS will publish for
public availability any comment submitted electronically, and, to the extent practicable any paper comments submitted, to
its public docket. Send paper submissions
to: CC:PA:LPD:PR (REG-114339-21),
Room 5203, Internal Revenue Service,
P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044.

REG-114339-21
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking; withdrawal of a notice of proposed
rulemaking; notification of hearing
SUMMARY: This document contains
proposed regulations under section 36B of
the Internal Revenue Code (the “Code”)
that would amend the existing regulations
regarding eligibility for the premium tax
credit (“PTC”) to provide that affordability of employer-sponsored minimum
essential coverage (employer coverage)
for family members of an employee is determined based on the employee’s share
of the cost of covering the employee and
those family members, not the cost of covering only the employee. The proposed
regulations also would add a minimum
value rule for family members of employees based on the benefits provided to the
family members. The proposed regulations would affect taxpayers who enroll,
or enroll a family member, in individual health insurance coverage through a
Health Insurance Exchange (“Exchange”)
and who may be allowed a PTC for the
coverage. This document also provides a
notice of a public hearing on these proposed regulations.
DATES: Written or electronic comments
must be received by June 6, 2022. As
of April 7, 2022, the notice of proposed
rulemaking published in the Federal
Register on September 1, 2015 (80 FR
52678), is withdrawn. A public hearing
has been scheduled for Monday, June
27, 2022, at 10:00 a.m. EDT. The IRS
must receive speakers’ outlines of topics
to be discussed at the public hearing by

April 25, 2022

FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations, Clara Raymond at (202)
317-4718; concerning submission of
comments or outlines, the hearing, or
any questions to attend the hearing by
teleconferencing, Regina Johnson at
(202) 317-5177 (not toll-free numbers)
or preferably by email to publichearings@irs.gov. If emailing, please include
the following information in the subject
line: Attend, Testify, or Question and
REG-114339-21.
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed
amendments to the Income Tax Regulations (26 CFR part 1) under section 36B
of the Code.
Section 36B provides a PTC for applicable taxpayers who meet certain

1030

eligibility requirements, including that a
member of the taxpayer’s family enrolls
in a qualified health plan (“QHP”) through
an Exchange for one or more “coverage
months.” Under §1.36B-1(d) of the Income Tax Regulations, a taxpayer’s family consists of the taxpayer, the taxpayer’s
spouse if filing jointly, and any dependents
of the taxpayer.
Section 1.36B-3(d)(1) provides that the
PTC for a coverage month is the lesser of:
(i) the premiums for the month, reduced
by any amounts that were refunded, for
one or more QHPs in which a taxpayer or
a member of the taxpayer’s family enrolls
(“enrollment premiums”); or (ii) the excess of the adjusted monthly premium for
the applicable benchmark plan over 1/12
of the product of a taxpayer’s household
income and the applicable percentage for
the taxable year (“taxpayer’s contribution
amount”).
Under section 36B(c)(2)(B) and
§1.36B-3(c), a month is a coverage month
for an individual only if the individual is
not eligible for minimum essential coverage (“MEC”) for that month (other than
coverage under a health care plan offered
in the individual market within a state).
Under section 5000A(f)(1)(B) of the
Code, the term MEC includes employer
coverage. If an individual is eligible for
employer coverage for a given month, no
PTC is allowed for the individual for that
month.
Section 36B(c)(2)(C) generally provides that an individual is not eligible for
employer coverage if the coverage offered
is unaffordable or does not provide minimum value. However, if the individual enrolls in employer coverage, the individual
is eligible for MEC, irrespective of whether the employer coverage is affordable
or provides minimum value. See section
36B(c)(2)(C)(iii) and §1.36B-2(c)(3)(vii).
Section
36B(c)(2)(C)(i)(II)
and
§1.36B-2(c)(3)(v)(A)(1) generally provide that employer coverage is unaffordable for an employee if the share of the
annual premium the employee must pay
for self-only coverage is more than the required contribution percentage of household income. The required contribution
percentage is 9.5 percent and is indexed

Bulletin No. 2022–17

annually under section 36B(c)(2)(C)(iv).1
Likewise, §1.36B-2(c)(3)(v)(A)(2) generally provides that employer coverage
is unaffordable for individuals eligible to
enroll in employer coverage because of
their relationship to the employee (related
individuals) if the share of the annual premium the employee must pay for self-only coverage is more than the required
contribution percentage of household income. Thus, the employee’s share of the
premium for family coverage, as defined
in §1.36B-1(m), is not considered in determining whether employer coverage is
affordable for related individuals.
Under section 36B(c)(2)(C)(ii) and
§1.36B-6(a)(1), an eligible employer-sponsored plan provides minimum
value only if the plan’s share of the total
allowed costs of benefits provided to an
employee is at least 60 percent. On November 4, 2014, the IRS released Notice
2014-69, 2014-48 I.R.B. 903, which advised taxpayers of the intent to propose
regulations providing that plans that fail
to provide substantial coverage for inpatient hospitalization or physician services
also do not provide minimum value. Notice 2014-69 noted that the Department of
Health and Human Services (HHS) was
concurrently issuing parallel guidance
and also provided that, pending issuance
of final Treasury regulations, an employee
will not be required to treat a non-hospital/
non-physician services plan as providing
minimum value for purposes of an employee’s eligibility for a PTC.
On November 26, 2014, HHS issued
proposed regulations providing that an
eligible employer-sponsored plan provides minimum value only if, in addition
to covering at least 60 percent of the total
allowed costs of benefits provided under
the plan, the plan benefits include substantial coverage of inpatient hospital services
and physician services. See 79 FR 70674.
On February 27, 2015, HHS finalized this
minimum value rule at 45 CFR 156.145(a).
See 80 FR 10750, 10872. On September
1, 2015, the Treasury Department and the
IRS issued proposed regulations under

section 36B (REG-143800-14, 80 FR
52678) (2015 proposed regulations) incorporating the substance of the minimum
value rule in the HHS final regulations.
The rule in the 2015 proposed regulations
issued by the Treasury Department and
the IRS relating to substantial coverage of
inpatient hospital services and physician
services has not been finalized.
On January 28, 2021, President Biden
issued Executive Order (EO) 14009,
Strengthening Medicaid and the Affordable Care Act (ACA). Section 3(a) of EO
14009 directs the Secretary of the Treasury to review, as soon as practicable, all
existing regulations and other agency actions to determine whether the actions are
inconsistent with the policy to protect and
strengthen the ACA. Section 3(a)(v) of
EO 14009 also directs the Secretary of the
Treasury, as part of this review, to examine policies or practices that may reduce
the affordability of coverage or financial
assistance for coverage, including for dependents. Consequently, the Treasury Department and the IRS have reviewed the
regulations under section 36B, including
§1.36B-2(c)(3)(v)(A)(2), which provides
that the affordability of employer coverage for related individuals is based on the
employee’s share of the annual premium
for self-only coverage, not the cost of family coverage. The Treasury Department
and the IRS have tentatively determined
that the rule in §1.36B-2(c)(3)(v)(A)(2) is
not required by the relevant statutes and
is inconsistent with the overall purpose of
the ACA to expand access to affordable
health care coverage.
Explanation of Provisions
I. Reasons for Regulatory Changes to
Affordability Rule
As explained in the Background section
of this preamble, individuals generally are
not allowed a PTC if they are eligible for
non-individual market MEC, including
employer coverage. However, individuals
are not eligible for employer coverage if

the coverage is unaffordable or does not
provide minimum value, unless they enroll in the coverage. Coverage is not affordable for an employee if the portion of
the premiums required to be paid by the
employee for self-only coverage exceeds
9.5 percent of household income. The
current regulations under section 36B provide that if self-only employer coverage is
affordable for an employee, then the coverage is also affordable for a spouse with
whom the employee is filing a joint return
and any dependents of the employee who
may be eligible to enroll in the employer coverage, regardless of the amount the
employee must pay to cover the spouse
and dependents. See §1.36B-2(c)(3)(v)(A)
(2).
Section 1.36B-2(c)(3)(v)(A)(2) was
promulgated as a final regulation in 2013.
See TD 9611 (78 FR 7264). The Treasury
Department and the IRS explained in the
preamble to the 2013 final regulation that
the language of section 36B, through the
cross-reference to section 5000A(e)(1)
(B),2 specifies that the affordability test
for related individuals is based on the
cost of self-only coverage. However, the
approach in the current regulations has
potentially impacted millions of Americans. Among those impacted are families
with children, some of whom have suffered economic hardship. In addition, the
current approach has undermined access
to more affordable health care coverage
by preventing access to lower-premium
subsidized Exchange plans. Under the
current regulations, a PTC is not allowed
for children and other family members
who have been offered employer coverage if the cost of the employee’s self-only coverage is affordable, regardless of
the employee’s cost to cover those family
members. Many of these families purchase health insurance, either through
a family member’s job or an Exchange,
but pay high portions of their income
towards premiums. Other families forgo
coverage altogether due to the high premium costs. Several studies have analyzed this problem.3

1
As adjusted, the required contribution percentage is 9.61 percent for 2022. See Rev. Proc. 2021-36, 2021-35 I.R.B. 357. For simplicity, this preamble refers to 9.5 percent as the required
contribution percentage.
2
Section 5000A provides rules regarding the individual shared responsibility payment, including an exemption from the payment for individuals who have an offer of employer coverage
that is unaffordable.
3
For example, see https://www.healthaffairs.org/do/10.1377/hblog20210520.564880/full/.

Bulletin No. 2022–17

1031

April 25, 2022

Pursuant to EO 14009, the Treasury
Department and the IRS have reexamined
the current interpretation of section 36B(c)
(2)(C)(i) in §1.36B-2(c)(3)(v)(A)(2). The
Treasury Department and the IRS have preliminarily determined that section 36B(c)
(2)(C)(i) does not compel the result that if
self-only employer coverage is affordable
for an employee, then the coverage also is
affordable for a spouse and any dependents.
To the contrary, the Treasury Department
and the IRS believe that the statute is better
read to require a separate affordability determination for employees and for family
members. Further, the Treasury Department
and the IRS are now of the view that the interpretation in the current regulations unduly weakens the ACA by basing affordability
solely on the premium cost for the employee’s self-only coverage and, therefore, the
interpretation in the current regulations is
contrary to the policy of the ACA to expand
access to affordable health care coverage.
As discussed more fully in part II of
this Explanation of Provisions, the Treasury Department and the IRS believe that
section 36B(c)(2)(C)(i) is best interpreted
in a manner that requires consideration of
the premium cost to the employee to cover not just the employee, but also other
members of the employee’s family who
may enroll in the employer coverage. This
interpretation would create consistency
across parallel provisions of the Code
enacted by the ACA, specifically with regard to the affordability tests in sections
36B and 5000A. Consequently, the Treasury Department and the IRS propose to
exercise the regulatory authority granted
in section 36B(h) to adopt an alternative
reading of section 36B(c)(2)(C)(i). Under
this alternative reading, affordability of
employer coverage for related individuals
in the employee’s family is determined
based on the cost of covering the employee and those related individuals.
II. Affordability Rule for Related
Individuals
A. Approach in Current Regulations
When the Treasury Department and the
IRS promulgated §1.36B-2(c)(3)(v)(A)(2)

as a final regulation in 2013, it was after
considerable deliberation regarding the
affordability rule for related individuals.
The Treasury Department and the IRS first
issued proposed regulations under section
36B in August 2011. See REG-131491-10
(76 FR 50931). In addition to proposing
general rules on all aspects of the PTC, the
2011 proposed regulations provided that
affordability for related individuals was
based on the amount an employee must
pay for self-only coverage. In response to
the 2011 proposed regulations, the Treasury Department and the IRS received a
significant number of comments on the
proposed affordability rule for related
individuals. To fully consider those comments and ensure a comprehensive analysis of the issue, the Treasury Department
and the IRS promulgated final regulations
in May 2012 that reserved with respect
to the affordability rule for related individuals and stated that future regulations
would address the issue. See TD 9590 (77
FR 30377). In February 2013, the Treasury Department and the IRS finalized the
affordability rule for related individuals as
initially proposed in 2011. See TD 9611
(78 FR 7264). In finalizing the rule as initially proposed in 2011 -- that is, providing that affordability for related individuals was based on the amount an employee
must pay for self-only coverage -- the
Treasury Department and the IRS focused
on the relevant statutory provisions in sections 36B(c)(2)(C)(i)(II), 5000A(e)(1)(B),
and 5000A(e)(1)(C).
Under section 36B(c)(2)(C)(i)(II), an
employee who does not enroll in employer coverage is not considered eligible for
the coverage if “the employee’s required
contribution (within the meaning of section 5000A(e)(1)(B)) with respect to the
plan exceeds 9.5 percent of the applicable
taxpayer’s household income.” The flush
language following this provision provides that “[t]his clause shall also apply
to an individual who is eligible to enroll
in the plan by reason of a relationship the
individual bears to the employee.” This
flush language does not specify how the
language in section 36B(c)(2)(C)(i)(II) is
intended to apply with respect to related
individuals or how the cross-reference to

section 5000A(e)(1)(B) is to be understood with regard to coverage of related
individuals.
Section 5000A(e)(1)(B)(i)4 provides
that, for an employee eligible to purchase
employer coverage, the term “required
contribution” means “the portion of the
annual premium which would be paid
by the individual . . . for self-only coverage.” For related individuals, the definition of “required contribution” in section
5000A(e)(1)(B)(i) is modified by a “special rule” in section 5000A(e)(1)(C). Section 5000A(e)(1)(C) provides that “[f]or
purposes of [section 5000A(e)(1)](B)(i), if
an . . . individual is eligible for minimum
essential coverage through an employer
by reason of a relationship to an employee, the determination under subparagraph
(A) shall be made by reference to the required contribution of the employee.” The
regulations under section 5000A interpret
section 5000A(e)(1)(C) as modifying
the required contribution rule in section
5000A(e)(1)(B)(i) with regard to coverage
for related individuals to take into account
the cost of covering the employee and the
related individuals, not just the employee.
Specifically, with respect to related individuals, §1.5000A-3(e)(3)(ii)(B) provides
that the required contribution for related
individuals is the amount an employee
must pay to cover the employee and the
related individuals. The affordability rule
for related individuals in §1.5000A-3(e)
(3)(ii)(B) was proposed on the same day
that the affordability rule for related individuals in §1.36B-2(c)(3)(v)(A)(2) was
finalized in TD 9611.
When §1.36B-2(c)(3)(v)(A)(2) was
promulgated as a final regulation in 2013,
the Treasury Department and the IRS
considered the statutory language of section 36B(c)(2)(C)(i)(II) and its cross-reference to section 5000A(e)(1)(B), as
well as the statutory language of section
5000A(e)(1)(B) and the cross-reference
in section 5000A(e)(1)(C) to section
5000A(e)(1)(B). Under one reading of
section 36B(c)(2)(C)(i)(II), the affordability rule for related individuals is determined solely by reference to section
5000A(e)(1)(B), without the modification to that section for related individuals

Section 5000A(e)(1) provides an exemption from the requirement to maintain MEC for individuals who are eligible only for coverage that is unaffordable. Under section 5000A(e)(1)(A),
coverage is unaffordable for an individual if the individual’s required contribution exceeds a certain percentage of the individual’s household income for the taxable year.
4

April 25, 2022

1032

Bulletin No. 2022–17

provided by section 5000A(e)(1)(C).
This reading results in affordability being
determined based on the cost of self-only
coverage to the employee. Under an alternative reading, the affordability rule
for related individuals is determined by
reference to section 5000A(e)(1)(B) taking into account the modification by section 5000A(e)(1)(C). With the issuance
of current §1.36B-2(c)(3)(v)(A)(2), the
Treasury Department and the IRS adopted the interpretation that affordability of
employer coverage for related individuals is based on the cost of self-only coverage to the employee.
B. Approach in Proposed Regulations
The Treasury Department and the IRS
recognize that the statutory language in
section 36B(c)(2)(C)(i)(II) supports two
different readings. Under one reading, reflected in current §1.36B-2(c)(3)(v)(A)(2),
the affordability rule for related individuals is determined solely by reference to
section 5000A(e)(1)(B), without the modification to that section for related individuals provided by section 5000A(e)(1)(C).
This reading results in affordability being
determined based on the cost of self-only
coverage to the employee. Under an alternative reading, however, the affordability
rule for related individuals is determined
by reference to section 5000A(e)(1)(B),
but also encompasses the modification of
5000A(e)(1)(B) by section 5000A(e)(1)
(C), which provides a special rule for related individuals.
These proposed regulations would
adopt the alternative reading, which the
Treasury Department and the IRS have
now preliminarily concluded is the better
reading of these provisions. Under this interpretation, because section 5000A(e)(1)
(C) begins with the language “[f]or purposes of [section 5000A(e)(1)](B)(i),” the
parenthetical cross reference in section
36B(c)(2)(C)(i)(II) to section 5000A(e)
(1)(B)(i) is understood to incorporate the
special rule in section 5000A(e)(1)(C) that
modifies the required contribution rule in

section 5000A(e)(1)(B)(i) when the coverage in question is for related individuals. Under this interpretation, a specific
reference in the flush language of section
36B(c)(2)(C)(i) to section 5000A(e)(1)(C)
is not necessary to require the consideration of section 5000A(e)(1)(C) in determining affordability for related individuals for section 36B purposes.5
This proposed amendment to the affordability rule for related individuals
would create greater consistency between
the affordability rules in section 36B(c)(2)
(C)(i) and the affordability rules in section
5000A(e)(1). The proposed amendment
would also promote consistency between
the affordability rules in these provisions
and 42 U.S.C. 18081(b)(4)(C), which requires Exchange applicants to separately
provide the required contributions of employees and of related individuals in order
to determine PTC eligibility; in the Treasury Department’s and the IRS’s view, the
requirement to provide this information
would make little sense if PTC eligibility
depended only on the cost to the employee for self-only coverage. In addition, the
proposed amendment would also support
efforts to achieve the goal of the ACA to
provide affordable, quality health care for
all Americans. See H.R. Rep. No. 111-243
(2009).
The proposed regulations would provide that an eligible employer-sponsored
plan is affordable for related individuals if
the portion of the annual premium the employee must pay for family coverage, that
is, the employee’s required contribution,
does not exceed 9.5 percent of household
income. For this purpose, family coverage means all employer plans that cover
any related individual other than the employee, including a self plus-one plan for
an employee enrolling one other family
member in the coverage. An employee’s
required contribution for family coverage
is the portion of the annual premium the
employee must pay for coverage of the
employee and all other individuals included in the employee’s family who are offered the coverage.

Some individuals who are not part of
the tax family might nonetheless be offered the employer coverage. For example, children up to age 26 might be offered
coverage by the taxpayer’s employer, but
those adult children might not be reported
on the employee’s tax return because they
do not qualify as dependents of the employee. The cost of covering individuals
who are offered the coverage but are not in
the employee’s family is not considered in
determining whether the employee’s family members have an offer of affordable
employer coverage, regardless of whether
the non-family member enrolls in the coverage. That is because, under §1.36B-2(c)
(4)(i), a related individual who is not a
spouse filing jointly with the employee
or a dependent of the employee, such as
a child of the employee who is no longer
the employee’s dependent, is treated as eligible for the employer coverage only if
he or she is enrolled in the coverage. Consequently, a related individual who is not
a spouse filing jointly with the employee
or a dependent of the employee does not
need a determination of unaffordable coverage to be eligible for the PTC. As a result, the cost of covering that individual
should not be considered in determining
whether other related individuals have an
offer of affordable employer coverage.
The proposed regulations would make
changes only to the affordability rule for
related individuals; they would make no
changes to the affordability rule for employees. As required by statute, employees continue to have an offer of affordable
employer coverage if the employee’s required contribution for self-only coverage
of the employee does not exceed the required contribution percentage of household income. Accordingly, under the proposed regulations, a spouse or dependent
of an employee may have an offer of employer coverage that is unaffordable even
though the employee has an affordable
offer of self-only coverage.
The proposed regulations also address
situations in which an individual has offers of coverage from multiple employers.

In Joint Committee on Taxation, Technical Explanation of the Revenue Provisions of the ”Reconciliation Act of 2010,” as amended, in combination with the “Patient Protection and Affordable Care Act,” (JCX-18-10), March 21, 2010 (the JCT report), the Joint Committee staff initially explained that “[u]naffordable is defined as coverage with a premium required to be
paid by the employee that is 9.5 percent or more of the employee’s household income, based on the type of coverage applicable (e.g., individual or family coverage).” The quoted language
was later revised to state that “[u]naffordable is defined as coverage with a premium required to be paid by the employee that is 9.5 percent or more of the employee’s household income,
based on self-only coverage.” See ERRATA for JCX-18-10, (JCX-27-10), May 4, 2010. Although the JCT report does not compel any particular reading of section 36B(c)(2)(C)(i)(II) as it
relates to family coverage, these differing interpretations by the Joint Committee staff further demonstrate the statutory ambiguity that renders either interpretation available under the ACA.
5

Bulletin No. 2022–17

1033

April 25, 2022

Under the proposed regulations, an individual with offers of coverage from multiple employers, either as an employee or a
related individual, has an offer of affordable coverage if at least one of the offers
is affordable.6 Thus, for example, assume
X is married and files a joint return with
X’s spouse, Y. If X has offers of coverage
from X’s employer and Y’s employer, X
has an offer of affordable coverage if the
self-only cost of X’s employer coverage
is affordable or if the family cost of Y’s
employer coverage is affordable. This
rule regarding multiple offers of coverage
is consistent with section 36B(c)(2)(B),
under which a month is not a coverage
month for an individual if the individual is
eligible for MEC for the month, including
employer coverage that is affordable and
provides minimum value. In this example,
X is eligible for affordable employer coverage if one or both of the offers of coverage to X is affordable.
The proposed change to the affordability rule for related individuals in
§1.36B-2(c)(3)(v)(A)(2) requires a conforming change to §1.36B-2(c)(3)(v)(B),
which provides that the affordability of
employer coverage for an employment
period that is less than a full calendar
year is based on the employee’s required
contribution for self-only coverage
(“part-year period rule”). The proposed
regulations would amend §1.36B-2(c)
(3)(v)(B) to provide a part-year period
rule for employees that is based on the
employee’s required contribution for
self-only coverage and a part-year period
rule for related individuals that is based
on the employee’s required contribution
for family coverage. Changes to other existing rules such as §1.36B-2(c)(3)(v)(A)
(4) (wellness incentive programs) and (5)
(employer contributions to health reimbursement arrangements integrated with
eligible employer-sponsored plans) are
not necessary because those paragraphs
refer to an “employee’s required contribution,” which, under the proposed regulations, would cover both the required
contribution for self-only coverage and
the required contribution for family
coverage.

III. Minimum Value
A. Minimum Value Cost of Benefits Rule
for Related Individuals
Section 1.36B-6(a)(1) provides that
an eligible employer-sponsored plan provides minimum value if the plan’s share
of the total allowed cost of benefits provided to an employee is at least 60 percent. The proposed regulations would
expand §1.36B-6(a) to provide a similar
minimum value rule for related individuals that is based on the level of coverage
provided to related individuals under an
employer-sponsored plan.
Section 36B(c)(2)(C)(ii) provides that
an employee is not eligible for employer
coverage when the employer-sponsored
plan does not provide minimum value.
Section 36B(c)(2)(C)(ii) does not specifically mention related individuals. Section
36B(c)(2)(C)(ii) could be interpreted to
mean that there is no minimum value requirement for related individuals so that a
related individual is eligible for employer
coverage as long as the coverage is affordable, regardless of whether the employer
coverage provides minimum value. Under
such an interpretation, if an employer offers coverage to an employee and related
individuals that is affordable, but does not
provide minimum value for the employee, an employee who does not enroll in
the coverage would not be eligible for the
coverage, but related individuals offered
the coverage would be eligible because
section 36B does not have a minimum
value requirement for related individuals.
That approach, however, was not adopted with the issuance of §1.36B-2(c)
(3)(i)(A), which was promulgated in final
regulations in 2012. See TD 9590 (77 FR
30377). Section 1.36B-2(c)(3)(i)(A) clarifies that there is a minimum value requirement for both employees and related individuals, stating that “an employee who
may enroll in an eligible employer-sponsored plan . . . that is minimum essential
coverage, and . . . a related individual, are
eligible for minimum essential coverage
under the plan for any month only if the
plan is affordable and provides minimum

value.” Under this long-standing rule, a
related individual who receives an offer
of employer-sponsored coverage that does
not provide minimum value is ineligible
for the coverage, provided that the related
individual does not enroll in the coverage.
Section 1.36B-2(c)(3)(i)(A) clarifies
that there is a minimum value requirement for related individuals; however,
§1.36B-6(a) provides the rule for determining whether an eligible employer-sponsored plan provides minimum value to related individuals. As explained in
the Background section of this preamble,
under §1.36B-6(a)(1), an eligible employer-sponsored plan provides minimum value if the plan’s share of the total allowed
cost of benefits provided to an employee is
at least 60 percent, regardless of the total
allowed costs of benefits provided to the
related individual. Thus, under this rule, if
the plan’s share of the total allowed cost
of benefits provided to an employee is below 60 percent, the plan does not provide
minimum value to employees nor to any
related individuals offered the coverage.
Without a separate minimum value rule
for related individuals based on the costs
of benefits provided to related individuals,
a PTC would not be allowed for a related individual offered coverage under a
plan that was affordable but that provided
minimum value to employees and not to
related individuals. This outcome would
undermine the benefit a related individual
would derive from the proposed amendment of the affordability rule for related
individuals. That is, the affordability of
employer coverage for related individuals
would be based on the employee’s cost of
covering the related individuals, but there
would be no assurance that affordable
coverage offered to the related individuals
provided a minimum value of benefits to
the related individuals.
The lack of a separate minimum value
rule for related individuals also would be
inconsistent with the overall goal of the
ACA in providing comprehensive, affordable health coverage, as well as the goal of
improving access to quality and affordable
health care. Therefore, these proposed
regulations provide in §1.36B-6(a)(2)(i)

The proposed rule for offers from multiple employers is consistent with the treatment under §1.36B-2(c)(3)(i) for situations in which an employee or family member may choose from multiple plans offered by an employer. In those situations, an individual has an offer of affordable coverage if at least one of the plans offered by the employer is affordable.
6

April 25, 2022

1034

Bulletin No. 2022–17

that an eligible employer-sponsored plan
satisfies the minimum value requirement
only if the plan’s share of the total allowed
costs of benefits provided to related individuals is at least 60 percent, similar to
the existing rule in §1.36B-6(a)(1) for employees. Further, to be considered to provide minimum value under §1.36B-6(a)
(2)(ii) of these proposed regulations, an
eligible-employer sponsored plan would
have to include substantial coverage of
inpatient hospital services and physician
services, as discussed in more detail in
section III.B. of this preamble.
B. Minimum Value Rule Regarding
Inpatient Hospitalization and Physician
Services
As noted earlier in the Background
section of this preamble, the Treasury
Department and the IRS issued proposed
regulations in September 2015 incorporating the substance of the minimum value
rule that was finalized by HHS in February 2015. The HHS final regulations
and §1.36B-6(a)(2) of the 2015 proposed
regulations provide that an eligible employer-sponsored plan provides minimum
value only if, in addition to covering at
least 60 percent of the total allowed costs
of benefits provided to an employee under the plan, the plan benefits include
substantial coverage of inpatient hospital
services and physician services. The Treasury Department and the IRS have not
finalized these regulations. The Treasury
Department and the IRS are withdrawing
the 2015 proposed regulations and reproposing in §1.36B-6(a)(1)(ii) without substantive change the minimum value rule
regarding inpatient hospital services and
physician services for employees. Pending issuance of final Treasury regulations,
an employee will not be required to treat a
non-hospital/non-physician services plan
as providing minimum value for purposes
of an employee’s eligibility for a PTC. See
Notice 2014-69.
In addition, the Treasury Department
and the IRS are proposing in this document to expand the minimum value rule
in §1.36B-6(a)(2) of the 2015 proposed
regulations to apply to related individuals.

7

Thus, §1.36B-6(a)(2)(ii) of the proposed
regulations would provide that an eligible
employer-sponsored plan provides minimum value to a related individual only if,
in addition to covering at least 60 percent
of the total allowed costs of benefits provided to the related individual, the plan
benefits include substantial coverage of
inpatient hospital services and physician
services.
IV. Premium Refunds Affecting the PTC
Computation
Section 1.36B-3(d)(1)(i) provides that,
in determining a taxpayer’s premium assistance amount7 for a coverage month,
the taxpayer’s enrollment premiums
for the month are the premiums for the
month, reduced by any amounts that were
refunded, for one or more QHPs in which
a taxpayer or a member of the taxpayer’s
family enrolls. Questions have arisen concerning refunds paid to a taxpayer in a
taxable year that is after the taxable year
the premium is paid and whether those refunds should be considered in determining
the taxpayer’s premium assistance amount
for the month to which the refund relates.
A medical loss ratio rebate under section
2718 of the Public Health Service Act is
an example of a premium refund that may
be paid to a taxpayer in a taxable year that
is after the taxable year the taxpayer paid
the premium.
Tax liability for a taxable year generally is determined based on events
occurring in that taxable year (the current taxable year). Events occurring in
a later taxable year, such as a refund of
a deductible amount paid in the current
taxable year, generally don’t affect the
tax liability of the current taxable year.
Thus, a taxpayer’s premium assistance
amount for a month in the current taxable year should not be affected by a
premium refund that was paid in a later
taxable year.
Consequently, the proposed regulations would clarify that, in computing the
premium assistance amount for a coverage month, a taxpayer’s enrollment premiums for the month are the premiums for
the month, reduced by any amounts that

were refunded in the same taxable year the
taxpayer incurred the premium liability.
V. Severability
If any provision in this rulemaking is
held to be invalid or unenforceable facially, or as applied to any person or circumstance, it shall be severable from the
remainder of this rulemaking, and shall
not affect the remainder thereof, or the application of the provision to other persons
not similarly situated or to other dissimilar
circumstances.
Statement of Availability of IRS
Documents
Guidance cited in this preamble is published in the Internal Revenue Bulletin
and is available from the Superintendent
of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by
visiting the IRS website at https://www.
irs.gov.
Proposed Applicability Dates
The proposed regulations under
§§1.36B-2, 1.36B-3, and 1.36B-6(a)(2)
are proposed to apply for taxable years
beginning after the date these regulations
are published as final regulations in the
Federal Register. As of the publication
date of these proposed regulations, the
proposed regulations are expected to be
finalized no later than the end of this year.
The Treasury Department and the IRS
have been working closely with HHS to
ensure that the federally-facilitated Exchange would be ready to implement the
proposed changes before the open enrollment for 2023 coverage. HHS, in coordination with the Treasury Department and
the IRS, intends to take all necessary steps
to support efforts by state-based Exchanges to implement any changes before the
open enrollment for 2023 coverage.
The proposed regulations under
§1.36B-6(a)(1)(i) are proposed to apply
for taxable years ending after December
31, 2013.
The proposed regulations under
§1.36B-6(a)(1)(ii) are proposed to apply

The terms “premium assistance amount” and “premium tax credit” (or PTC) have the same meaning.

Bulletin No. 2022–17

1035

April 25, 2022

for plan years beginning after November
3, 2014.
Special Analyses
I. Regulatory Planning and Review –
Economic Analysis
EOs 12866 and 13563 direct agencies
to assess costs and benefits of available
regulatory alternatives and, if regulation is
necessary, to select regulatory approaches
that maximize net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). EO 13563 emphasizes
the importance of quantifying both costs
and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
These proposed regulations have been
designated as subject to review under EO
12866 pursuant to the Memorandum of
Agreement (April 11, 2018) (MOA) between the Treasury Department and the
Office of Management and Budget (OMB)
regarding review of tax regulations.
A. Background
1. Affordability of Employer Coverage for
Family Members of an Employee
As noted earlier in this preamble, section 36B provides a PTC for applicable
taxpayers who meet certain eligibility requirements, including that the taxpayer or
one or more family members is enrolled
in a QHP through an Exchange (Exchange
coverage) for one or more months in
which they are not eligible for other MEC.
However, an individual who is eligible to
enroll in employer coverage, but chooses
not to, is not considered eligible for the
employer coverage if it is “unaffordable.”
Section 36B defines employer coverage as
unaffordable for an employee if the employee’s share of the self-only premium is
more than 9.5 percent of the employee’s
household income.
Section 1.36B-2(c)(3)(v)(A)(2) provides that affordability of employer coverage for each related individual of the
employee is determined by the cost of
self-only coverage. Thus, the employee
and any related individuals included in the
employee’s family, within the meaning
of §1.36B-1(d), are eligible for MEC and

April 25, 2022

are ineligible for the PTC if (1) the plan
provides minimum value and (2) the employee’s share of the self-only coverage
is not more than 9.5 percent of household
income (that is, the self-only coverage for
the employee is “affordable”).
2. Description of the Proposed
Regulations
The proposed regulations would revise §1.36B-2(c)(3)(v)(A)(2) to provide a
separate affordability test for related individuals based on the cost to the employee
of family coverage. The proposed regulations do not change the affordability test
for the employee. As a result, whenever
a family applies for Exchange coverage
and one or more family members has an
offer of employer coverage, the Exchange
will perform the following affordability
determinations: one determination for the
employee based on the cost of self-only
coverage, one determination for the related individuals based on the cost of family
coverage, and additional determinations
for any related individuals who have an
offer of coverage from another employer.
It is therefore possible that family members would be eligible for PTC but the employee would not. In this case, if the entire family chooses to enroll in Exchange
coverage with advance payments of the
premium tax credit (APTC), the APTC
would be paid only for coverage of the
employee’s family members but would
not be paid for coverage of the employee.
B. Baseline
The Treasury Department and the IRS
have assessed the benefits and costs of the
proposed regulations relative to a no-action baseline reflecting anticipated Federal income tax-related behavior in the absence of these regulations.
C. Affected Entities
Some families with an offer of employer coverage to the employee and at least
one other family member would be newly
eligible for a PTC for the Exchange coverage of the non-employee family members.
The proposed regulations would have
no effect on families for whom self-only
employer coverage costs more than 9.5

1036

percent of household income – given that
family coverage is more expensive than
self-only coverage – because the affordability status of their employer coverage
is unchanged. Similarly, the proposed
regulations would not affect families
for whom the cost of family employer
coverage does not exceed 9.5 percent of
household income because their coverage is determined to be affordable either
way. In contrast, the proposed regulations
would affect only family members – other than the employee – for whom the employee’s cost for the available employer
coverage does not exceed 9.5 percent of
household income for a self-only plan but
exceeds 9.5 percent of household income
for a family plan or for whom the offer of
the family plan is affordable but doesn’t
provide minimum value. The Treasury
Department and the IRS are unable to estimate the size of the population affected
by the proposed regulations because contribution amounts for family coverage are
not observed in the tax data.
Employers may see a shift for some
of their employees from family coverage
to self-only coverage when family members newly qualify for PTC. The cost per
enrollee could increase or decrease depending on the characteristics of those
that remain covered. However, this shift
would likely lead to a decrease in the total
amount employers are spending on health
insurance as the Federal government increases spending on PTC for the non-employee family members.
D. Economic Analysis of the Proposed
Regulations
1. Overview
For some families, the proposed regulations would lower the premium contributions required to purchase coverage
for all family members by allowing family members other than the employee to
qualify for a PTC. For some families with
offers of employer coverage who will be
newly eligible for the PTC, the combined
cost of split coverage (self-only employer
coverage for the employee plus PTC-subsidized Exchange coverage for related individuals) would be lower than what they
pay for family coverage through the employer. Some low-income families with

Bulletin No. 2022–17

uninsured individuals where the employee is offered low-cost, self-only employer
coverage and relatively high-cost family
employer coverage would gain access to
a lower-cost option through eligibility for
the PTC on behalf of one or more related
individuals.
However, the cost for families to purchase Exchange coverage with APTC is
determined in part by the applicable percentage and household income, which are
the same regardless of the number of individuals actually covered. Therefore, if the
number of individuals needing Exchange
coverage is small – such as when some
family members have access to other
MEC – the cost of Exchange coverage per
enrollee is relatively high when added to
the cost of the employee share of self-only employer coverage. Furthermore, split
coverage also means multiple deductibles
and maximum out-of-pocket limits for the
family, which potentially increases outof-pocket costs for families. As a result of
these features, many families with offers
of employer coverage who would be newly eligible for the PTC under the proposed
regulations – including families with some
uninsured individuals – would not see any
savings in the combined cost of out-ofpocket premiums and cost sharing. Lastly,
many families may prefer the benefits and
provider networks of employer coverage,
compared to Exchange coverage. Taking
all these factors into account, the Treasury
Department and the IRS have determined
that new take-up of Exchange coverage
may be modest for eligible families because many would either still prefer employer coverage or prefer to purchase other goods and services, or save or invest,
rather than insure all family members.
2. Benefits
Gain of health insurance coverage. For
those individuals who are uninsured because the premiums for family coverage
through a family member’s employer are
unaffordable, gaining access to PTC for
the purchase of Exchange coverage may
be more affordable and prompt some of
them to take up coverage.
Additional health insurance option. For
those individuals who are covered by family coverage through a family member’s
employer that costs more than 9.5 percent

Bulletin No. 2022–17

of their household income, the proposed
regulations would, by providing access to
a PTC, give them an additional option that
could provide coverage at a lower cost or
with more comprehensive benefits.
The Treasury Department and the IRS
are unable to estimate the size of the benefits of the proposed regulations because
contribution amounts for family coverage
are not observed in the tax data. The Treasury Department and the IRS request comments that provide data, other evidence, or
models that provide insight on this issue.
3. Costs
Administrative costs. Adding this new
option for eligibility for PTC increases the
cost to the IRS to evaluate PTC claims.
The IRS’s PTC infrastructure will require
one-time changes to certain processes,
forms, and instructions to be implemented in time for the 2023 tax year, and the
cost of these changes is expected to be
negligible. The Centers for Medicare &
Medicaid Services (“CMS”), as the administrator of the Federally-facilitated
Exchanges and the federal Exchange eligibility and enrollment platform, and the
State-based Exchanges that operate their
own Exchange eligibility and enrollment
platforms will also incur administrative
costs as the Exchanges will have primary
responsibility for implementing the rule
as part of the eligibility and enrollment
process when families are applying for
Exchange coverage with APTC. Exchanges will incur one-time costs to update Exchange eligibility systems to account for
the new treatment of family contribution
amounts for employer coverage for purposes of determining eligibility for APTC,
and CMS, State-based Exchanges, State
Medicaid Agencies, and CMS-approved
Enhanced Direct Enrollment partners will
incur administrative costs to make conforming updates to their respective consumer applications and consumer-facing
affordability tools. The Treasury Department and the IRS anticipate total administrative costs to CMS, Exchanges, State
Medicaid Agencies, and Enhanced Direct
Enrollment partners associated with the
proposed regulation to be modest, and
request comments from impacted stakeholders to inform administrative cost
estimates.

1037

4. Transfers
Increased PTC costs for new Exchange
enrollees. Because some individuals may
be newly eligible for PTC, some individuals may move from employer coverage
or uninsured status to Exchange coverage. Thus, the proposed regulations may
increase the amount of PTC being paid
by the government and reduce employer
contributions.
Decreased employer exclusion for people who drop employer coverage. If individuals drop their employer coverage, or
do not enroll when they otherwise would
have, to take up Exchange coverage, the
amount of money that was going toward
their employer coverage, which provides
tax-preferred health benefits, will go into
the employee’s wages, other employees’
wages, and employer profits and will no
longer be tax exempt. Thus, the proposed
regulations may increase the amount of
tax revenue received from income and
payroll taxes.
The Treasury Department and the IRS
are unable to estimate the size of the population affected by the proposed regulations
because contribution amounts for family
coverage are not observed in the tax data.
The Treasury Department and the IRS request comments that provide data, other
evidence, or models that provide insight
on this issue.
5. Impact on Small Entities
When an agency issues a proposed
rulemaking, the Regulatory Flexibility
Act (5 U.S.C. chapter 6) (the “Act”) requires the agency to “prepare and make
available for public comment an initial
regulatory flexibility analysis” that “describe[s] the impact of the proposed rule
on small entities.” See 5 U.S.C. 603(a).
The term “small entities” is defined in 5
U.S.C. 601 to mean “small business,”
“small organization,” and “small governmental jurisdiction,” which are also
defined in 5 U.S.C. 601. Small business
size standards define whether a business
is “small” and have been established for
types of economic activities, or industry,
generally under the North American Industry Classification System (NAICS).
See title 13, part 121 of the Code of Federal Regulations (titled “Small Business Size

April 25, 2022

Regulations”). The size standards look at
various factors, including annual receipts,
number of employees, and amount of assets, to determine whether the business is
small. See title 13, § 121.201 of the Code
of Federal Regulations for the Small Business Size Standards by NAICS Industry.
Section 605 of the Act provides an
exception to the requirement to prepare
an initial regulatory flexibility analysis
if the agency certifies that the proposed
rulemaking will not have a significant
economic impact on a substantial number
of small entities. The Treasury Department and the IRS hereby certify that these
proposed regulations will not have a significant economic impact on a substantial
number of small entities. This certification
is based on the fact that the majority of
the effect of the proposed regulations falls
on individual taxpayers, and entities will
experience only small changes.
6. Impact on Small Business
Pursuant to section 7805(f) of the
Code, these proposed regulations have
been submitted to the Chief Counsel for
the Office of Advocacy of the Small Business Administration for comment on their
impact on small business.
II. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates
Reform Act of 1995 (“UMRA”) requires
that agencies assess anticipated costs and
benefits and take certain other actions before issuing a final rule that includes any
Federal mandate that may result in expenditures in any one year by a state, local, or
tribal government, in the aggregate, or by
the private sector, of $100 million (updated annually for inflation). This proposed
rule does not include any Federal mandate
that may result in expenditures by state,
local, or tribal governments, or by the private sector in excess of that threshold.
III. Executive Order 13132: Federalism
EO 13132 (titled “Federalism”) prohibits an agency from publishing any rule
that has federalism implications if the rule
either imposes substantial, direct compliance costs on state and local governments,
and is not required by statute, or preempts

April 25, 2022

state law, unless the agency meets the consultation and funding requirements of section 6 of the EO. This proposed rule does
not have federalism implications and does
not impose substantial direct compliance
costs on state and local governments or
preempt state law within the meaning of
the EO.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to comments that are submitted timely to the IRS as prescribed in this
preamble in the ADDRESSES section.
The Treasury Department and the IRS request comments on all aspects of the proposed regulations, including the economic
impact of the proposed regulations. Any
electronic comments submitted, and to the
extent practicable any paper comments
submitted, will be made available at www.
regulations.gov or upon request.
A public hearing has been scheduled
for June 27, 2022, beginning at 10:00 a.m.
EDT. Announcement 2020-4, 2020-17
IRB 1, provides that until further notice,
public hearings conducted by the IRS will
be held telephonically.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Individuals who wish
to testify (by telephone) at the public
hearing must send an email to publichearings@irs.gov to receive the telephone
number and access code for the hearing.
The subject line of the email must contain
the regulation number (REG-114339-21)
for the hearing and the word TESTIFY.
For example, the subject line may say:
Request to TESTIFY at Hearing for REG114339-21. The email should also include
a copy of the speaker’s outline of topics.
The email requesting to speak must be
received by June 13, 2022. Speakers will
have up to ten minutes to testify and may
be asked questions by the panel.
Individuals who want to attend the
public hearing by telephone must also
send an email to publichearings@irs.gov
to receive the telephone number and access code for the hearing. The subject line
of the email must contain the regulation
number (REG-114339-21) and the word
ATTEND. For example, the subject line
may say: Request to ATTEND Hearing for
REG-114339-21. Email requests to attend

1038

the public hearing must be received by
5:00 p.m. EDT on June 23, 2022.
The telephonic hearing will be made
accessible to people with disabilities. To
request special assistance during the telephonic hearing, please contact the Publications and Regulations Branch of the
Office of Associate Chief Counsel (Procedure and Administration) by sending
an email to publichearings@irs.gov (preferred) or by telephone at (202) 317-5177
(not a toll-free number) by June 22, 2022.
Any questions regarding speaking at or
attending the public hearing may also be
emailed to publichearings@irs.gov.
Drafting Information
The principal author of these proposed
regulations is Suzanne R. Sinno of the Office of Associate Chief Counsel (Income
Tax and Accounting). However, other personnel from the Treasury Department and
the IRS participated in the development of
the regulations.
Withdrawal of Notice of Proposed
Rulemaking
Accordingly, under the authority of
26 U.S.C. 7805, the notice of proposed
rulemaking (REG-143800-14) that was
published in the Federal Register on
September 1, 2015 (80 FR 52678), is
withdrawn.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.36B-2 is amended by:
1. Revising the first sentence and adding
a sentence following the first sentence
of paragraph (c)(3)(v)(A)(2).
2. Adding paragraph (c)(3)(v)(A)(8).

Bulletin No. 2022–17

3.
4.

5.

Revising the second sentence of paragraph (c)(3)(v)(B).
In paragraph (c)(3)(v)(D), Examples
1 through 9 are designated as paragraphs (c)(3)(v)(D)(1) through (9),
respectively.
In newly designated paragraphs (c)
(3)(v)(D)(3), (5), (6), (7), and (9),
redesignating the paragraphs in the
first column as the paragraphs in the
second column:

Old paragraphs
(c)(3)(v)(D)(3)(i)
through (ii)
(c)(3)(v)(D)(5)(i)
through (ii)
(c)(3)(v)(D)(6)(i)
through (ii)
(c)(3)(v)(D)(7)(i)
through (iv)
(c)(3)(v)(D)(9)(i)
through (ii)

New paragraphs
(c)(3)(v)(D)(3)(i)
through (ii)
(c)(3)(v)(D)(5)(i)
through (ii)
(c)(3)(v)(D)(6)(i)
through (ii)
(c)(3)(v)(D)(7)(i)
through (iv)
(c)(3)(v)(D)(9)(i)
through (ii)

6.

Revising newly designated paragraphs (c)(3)(v)(D)(1) and (2).
7. Redesignating paragraphs (c)(3)
(v)(D)(3) through (9) as paragraphs (c)(3)(v)(D)(7) through (13),
respectively.
8. Adding new paragraphs (c)(3)(v)(D)
(3) through (6);
9. Revising the heading for newly
redesignated paragraph (c)(3)(v)(D)
(7), the heading and first sentence
of newly redesignated paragraph (c)
(3)(v)(D)(8), the heading of newly
redesignated paragraph (c)(3)(v)(D)
(9), and the first sentence of newly
redesignated paragraph (c)(3)(v)(D)
(9)(i).
10. In the headings for newly redesignated paragraphs (c)(3)(v)(D)(10)
through (13), removing the first
period and adding a colon in its place.
11. Revising paragraph (e)(1).
12. Adding paragraph (e)(5).
The revisions and additions read as
follows:
§1.36B-2 Eligibility for premium tax
credit.
*****
(c) * * *

Bulletin No. 2022–17

(3) * * *
(v) * * *
(A) * * *
(2) * * * Except as provided in paragraph (c)(3)(v)(A)(3) of this section, an
eligible employer-sponsored plan is affordable for a related individual if the employee’s required contribution for family
coverage under the plan does not exceed
the required contribution percentage,
as defined in paragraph (c)(3)(v)(C) of
this section, of the applicable taxpayer’s
household income for the taxable year.
For purposes of this paragraph (c)(3)(v)
(A)(2), an employee’s required contribution for family coverage is the portion of
the annual premium the employee must
pay for coverage of the employee and all
other individuals included in the employee’s family, as defined in §1.36B-1(d),
who are offered coverage under the eligible employer-sponsored plan. * * *
*****
(8) Multiple offers of coverage. An individual who has offers of coverage under
eligible employer-sponsored plans from
multiple employers, either as an employee or a related individual, has an offer of
affordable coverage if at least one of the
offers of coverage is affordable under
paragraph (c)(3)(v)(A)(1) or (2) of this
section.
(B) * * * Coverage under an eligible
employer-sponsored plan is affordable for a
part-year period if the annualized required
contribution for self-only coverage, in the
case of an employee, or family coverage,
in the case of a related individual, under the
plan for the part-year period does not exceed the required contribution percentage
of the applicable taxpayer’s household income for the taxable year. * * *
*****
(D) * * *
(1) Example 1: Basic determination of affordability. For all of 2023, taxpayer C works for an employer, X, that offers its employees and their spouses a health insurance plan under which, to enroll in
self-only coverage, C must contribute an amount for
2023 that does not exceed the required contribution
percentage of C’s 2023 household income. Because
C’s required contribution for self-only coverage does
not exceed the required contribution percentage of
C’s household income, under paragraph (c)(3)(v)(A)
(1) of this section, X’s plan is affordable for C, and
C is eligible for minimum essential coverage for all
months in 2023.
(2) Example 2: Basic determination of affordability for a related individual. (i) The facts are the

1039

same as in paragraph (c)(3)(v)(D)(1) of this section
(Example 1), except that C is married to J, they file a
joint return, and to enroll C and J, X’s plan requires
C to contribute an amount for coverage for C and
J for 2023 that exceeds the required contribution
percentage of C’s and J’s household income. J does
not work for an employer that offers employer-sponsored coverage.
(ii) J is a member of C’s family as defined in
§1.36B-1(d). Because C’s required contribution for
coverage of C and J exceeds the required contribution percentage of C’s and J’s household income,
under paragraph (c)(3)(v)(A)(2) of this section, X’s
plan is unaffordable for J. Accordingly, J is not eligible for minimum essential coverage for 2023. However, under paragraph (c)(3)(v)(A)(1) of this section,
X’s plan is affordable for C, and C is eligible for
minimum essential coverage for all months in 2023.
(3) Example 3: Multiple offers of coverage. The
facts are the same as in paragraph (c)(3)(v)(D)(2) of
this section (Example 2), except that J works all year
for an employer that offers employer-sponsored coverage to employees. J’s required contribution for the
cost of self-only coverage from J’s employer does
not exceed the required contribution percentage of
C’s and J’s household income. Although the coverage offered by C’s employer for C and J is unaffordable for J, the coverage offered by J’s employer is
affordable for J. Consequently, under paragraphs (c)
(3)(v)(A)(1) and (8) of this section, J is eligible for
minimum essential coverage for all months in 2023.
(4) Example 4: Cost of covering individuals not
part of taxpayer’s family. (i) D and E are married,
file a joint return, and have two children, F and G,
under age 26. F is a dependent of D and E, but G
is not. D works all year for an employer that offers
employer-sponsored coverage to employees, their
spouses, and their children under age 26. E, F, and G
do not work for employers offering coverage. D’s required contribution for self-only coverage under D’s
employer’s coverage does not exceed the required
contribution percentage of D’s and E’s household
income. D’s required contribution for coverage of D,
E, F, and G exceeds the required contribution percentage of D’s and E’s household income, but D’s
required contribution for coverage of D, E, and F
does not exceed the required contribution percentage
of the household income.
(ii) E and F are members of D’s family as defined
in §1.36B-1(d). G is not a member of D’s family
under §1.36B-1(d), because G is not D’s dependent.
Under paragraph (c)(3)(v)(A)(1) of this section, D’s
employer’s coverage is affordable for D because D’s
required contribution for self-only coverage does not
exceed the required contribution percentage of D’s
and E’s household income. D’s employer’s coverage
also is affordable for E and F, because, under paragraph (c)(3)(v)(A)(2) of this section, D’s required
contribution for coverage of D, E, and F does not
exceed the required contribution percentage of D’s
and E’s household income. Although D’s cost to cover D, E, F, and G exceeds the required contribution
percentage of D’s and E’s household income, under
paragraph (c)(3)(v)(A)(2) of this section, the cost to
cover G is not considered in determining whether D’s
employer’s coverage is affordable for E and F, regardless of whether G actually enrolls in the plan, because G is not in D’s family. D, E, and F are eligible

April 25, 2022

for minimum essential coverage for all months in
2023. Under paragraph (c)(4)(i) of this section, G is
considered eligible for the coverage offered by D’s
employer only if G enrolls in the coverage.
(5) Example 5: More than one family member
with an employer offering coverage. (i) K and L are
married, file a joint return, and have one dependent
child, M. K works all year for an employer that offers
coverage to employees, spouses, and children under
age 26. L works all year for an employer that offers
coverage to employees only. K’s required contribution for self-only coverage under K’s employer’s
coverage does not exceed the required contribution percentage of K’s and L’s household income.
Likewise, L’s required contribution for self-only
coverage under L’s employer’s coverage does not
exceed the required contribution percentage of K’s
and L’s household income. However, K’s required
contribution for coverage of K, L, and M exceeds
the required contribution percentage of K’s and L’s
household income.
(ii) L and M are members of K’s family as defined
in §1.36B-1(d). Under paragraph (c)(3)(v)(A)(1) of
this section, K’s employer’s coverage is affordable
for K because K’s required contribution for self-only
coverage does not exceed the required contribution
percentage of K’s and L’s household income. Similarly, L’s employer’s coverage is affordable for L,
because L’s required contribution for self-only coverage does not exceed the required contribution percentage of K’s and L’s household income. Thus, K
and L are eligible for minimum essential coverage
for all months in 2023. However, under paragraph
(c)(3)(v)(A)(2) of this section, K’s employer’s coverage is unaffordable for M, because K’s required
contribution for coverage of K, L, and M exceeds
the required contribution percentage of K’s and L’s
household income. Accordingly, M is not eligible for
minimum essential coverage for 2023.
(6) Example 6: Multiple offers of coverage for
a related individual. (i) The facts are the same as in
paragraph (c)(3)(v)(D)(5) of this section (Example
5), except that L works all year for an employer that
offers coverage to employees, spouses, and children
under age 26. L’s required contribution for coverage
of K, L, and M does not exceed the required contribution percentage of K’s and L’s household income.
(ii) Although M is not eligible for affordable
employer coverage under K’s employer’s coverage,
paragraph (c)(3)(v)(A)(8) of this section dictates that
L’s employer coverage must be evaluated to determine whether L’s employer coverage is affordable
for M. Under paragraph (c)(3)(v)(A)(2) of this section, L’s employer’s coverage is affordable for M,
because L’s required contribution for K, L, and M
does not exceed the required contribution percentage of K’s and L’s household income. Accordingly,
M is eligible for minimum essential coverage for all
months in 2023.
(7) Example 7: Determination of unaffordability
at enrollment. * * *

April 25, 2022

(8) Example 8: Determination of unaffordability
for plan year. The facts are the same as in paragraph
(c)(3)(v)(D)(7) of this section (Example 7), except
that X’s employee health insurance plan year is September 1 to August 31. * * *
(9) Example 9: No affordability information affirmatively provided for annual redetermination. (i)
The facts are the same as in paragraph (c)(3)(v)(D)
(7) of this section (Example 7), except the Exchange
redetermines D’s eligibility for advance credit payments for 2015. * * *

*****
(e) * * *
(1) Except as provided in paragraphs
(e)(2) through (5) of this section, this section applies to taxable years ending after
December 31, 2013.
*****
(5) The first two sentences of paragraph (c)(3)(v)(A)(2), paragraph (c)(3)(v)
(A)(8), the second sentence of paragraph
(c)(3)(v)(B), paragraphs (c)(3)(v)(D)(1)
through (6), and the first sentences of
paragraphs (c)(3)(v)(D)(8) and (9) of this
section apply to taxable years beginning
after [date final regulations are published
in the Federal Register].
Par. 3. Section 1.36B-3 is amended
by revising paragraphs (d)(1)(i) and (n)
(1) and adding paragraph (n)(3) to read as
follows:
§1.36B-3 Computing the premium
assistance credit amount.

*****
(d) * * *
(1) * * *
(i) The premiums for the month, reduced by any amounts that were refunded
in the same taxable year as the premium
liability is incurred, for one or more qualified health plans in which a taxpayer or a
member of the taxpayer’s family enrolls
(enrollment premiums); or
*****
(n) * * * (1) Except as provided in
paragraphs (n)(2) and (3) of this section,
this section applies to taxable years ending after December 31, 2013.
*****
(3) Paragraph (d)(1)(i) of this section
applies to taxable years beginning after

1040

[the date final regulations are published in
the Federal Register].
Par. 4. Section 1.36B-6 is amended by
revising paragraphs (a) and (g)(2) to read
as follows:
§1.36B-6 Minimum value.
(a) In general--(1) Employees. An eligible employer-sponsored plan provides
minimum value (MV) for an employee of
the employer offering the coverage only
if-(i) The plan’s MV percentage, as defined in paragraph (c) of this section, is at
least 60 percent based on the plan’s share
of the total allowed costs of benefits provided to the employee; and
(ii) The plan provides substantial coverage of inpatient hospital services and
physician services.
(2) Related individuals. An eligible employer-sponsored plan provides MV for
an individual who may enroll in the plan
because of a relationship to an employee
of the employer offering the coverage (a
related individual) only if-(i) The plan’s MV percentage, as defined in paragraph (c) of this section, is at
least 60 percent based on the plan’s share
of the total allowed costs of benefits provided to the related individual; and
(ii) The plan provides substantial coverage of inpatient hospital services and
physician services.
*****
(g) * * *
(2) Exceptions. (i) Paragraph (a)(1)(ii)
of this section applies for plan years beginning after November 3, 2014; and
(ii) Paragraph (a)(2) of this section applies to taxable years beginning after [date
final regulations are published in the Federal Register].
Douglas W. O’Donnell,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on April
5, 2022, 8:45 a.m., and published in the issue of the
Federal Register for April 7, 2022, 87 F.R. 20354)

Bulletin No. 2022–17

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
­effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is being made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously published ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the

new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rulings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.

A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.

Bulletin No. 2022–17

ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

April 25, 2022

Numerical Finding List1

Revenue Procedures:—Continued

Bulletin 2022–17

2022-20, 2022-14 I.R.B. 945
2022-21, 2022-16 I.R.B. 1015

Announcements:
2022-3, 2022-8 I.R.B. 788
2022-4, 2022-9 I.R.B. 789
2022-5, 2022-11 I.R.B. 825
2022-6, 2022-13 I.R.B. 934
2022-7, 2022-15 I.R.B. 946

AOD:
2022-1, 2022-06 I.R.B. 466
2022-2, 2022-12 I.R.B. 903

Notices:
2022-1, 2022-02 I.R.B. 304
2022-2, 2022-02 I.R.B. 304
2022-3, 2022-02 I.R.B. 308
2022-4, 2022-02 I.R.B. 309
2022-5, 2022-05 I.R.B. 457
2022-6, 2022-05 I.R.B. 460
2022-7, 2022-06 I.R.B. 469
2022-8, 2022-07 I.R.B. 491
2022-9, 2022-10 I.R.B. 811
2022-10, 2022-10 I.R.B. 815
2022-12, 2022-12 I.R.B. 906
2022-11, 2022-14 I.R.B. 939
2022-13, 2022-14 I.R.B. 940
2022-14, 2022-14 I.R.B. 941

Revenue Rulings:
2022-1, 2022-02 I.R.B. 301
2022-2, 2022-04 I.R.B. 451
2022-3, 2022-06 I.R.B. 467
2022-4, 2022-10 I.R.B. 790
2022-5, 2022-10 I.R.B. 792
2022-6, 2022-12 I.R.B. 904
2022-7, 2022-14 I.R.B. 935
2022-8, 2022-14 I.R.B. 936

Treasury Decisions:
9959, 2022-03 I.R.B. 328
9961, 2022-03 I.R.B. 430
9960, 2022-07 I.R.B. 481
9962, 2022-11 I.R.B. 823

Proposed Regulations:
REG-118250-20, 2022-07 I.R.B. 753
REG-105954-20, 2022-11 I.R.B. 828
REG-114209-21, 2022-11 I.R.B. 898
REG-114209-21, 2022-11 I.R.B. 898
REG-121508-18, 2022-15 I.R.B. 996
REG-114339-21, 2022-17 I.R.B. 1030

Revenue Procedures:
2022-1, 2022-01 I.R.B. 1
2022-2, 2022-01 I.R.B. 120
2022-3, 2022-01 I.R.B. 144
2022-4, 2022-01 I.R.B. 161
2022-5, 2022-01 I.R.B. 256
2022-7, 2022-01 I.R.B. 297
2022-9, 2022-02 I.R.B. 310
2022-11, 2022-03 I.R.B. 449
2022-8, 2022-04 I.R.B. 451
2022-10, 2022-06 I.R.B. 473
2022-13, 2022-06 I.R.B. 477
2022-12, 2022-07 I.R.B. 494
2022-14, 2022-07 I.R.B. 502
2022-15, 2022-13 I.R.B. 908
2022-17, 2022-13 I.R.B. 930
2022-17, 2022-13 I.R.B. 933
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin
2020–52, dated December 27, 2021.
1

April 25, 2022

ii

Bulletin No. 2022–17

Finding List of Current Actions on
Previously Published Items1
Bulletin 2022–17

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2020–27 through 2020–52 is in Internal Revenue Bulletin
2020–52, dated December 27, 2021.
1

Bulletin No. 2022–17

iii

April 25, 2022

Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue
Bulletins are available at www.irs.gov/irb/.

We Welcome Comments About the Internal Revenue Bulletin

If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it,
we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page
www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave.
NW, IR-6230 Washington, DC 20224.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Abe611c0985936ffe. Public record. Not legal advice.