Mintz Levin Examines the ACA Premium Tax Credit Calculation

In "9.5% ≠ 9.56% (And Why It Matters to Applicable Large Employers)," Alden J. Bianchi of Mintz Levin explains that:

"While employers sometimes view the Affordable Care Act’s employer shared responsibility (or “pay-or-play”) rules in isolation, they don’t operate that way. Instead, they exist side-by-side with other provisions of the Act. In particular, the Act’s rules providing premium tax subsidies to low- and moderate-income individuals correlate with an employer’s liability for assessable payments. Of interest to employers is that, generally, where there are no individual subsidies, there are no employer penalties. In a recently issued revenue procedure (Rev. Proc. 2014-37), the Treasury Department announced adjustments to parameters that impact premium tax subsidies. One of the adjustments made changes to a table used to calculate an individual’s premium tax credit. While the adjustments addressed premium tax credits under the Act, it was not immediately apparent what impact, if any, the change would have on employers. As it turns out, the answer is, none."

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