1 minute read:
The IRS updated indexing adjustments for certain provisions under IRC Section 36B in Revenue Procedure 2020-36. See RP 2020-36. In particular, the initial and final premium percentages listed in the “Applicable Percentage” Table in Internal Revenue Code Section 36B(b)(3)(A)(i) were adjusted for the 2021 calendar year as follows.
| Household income percentage of Federal poverty line: | Initial percentage | Final percentage |
| Less than 133% | 2.07% | 2.07% |
| At least 133% but less than 150% | 3.10% | 4.14% |
| At least 150% but less than 200% | 4.14% | 6.52% |
| At least 200% but less than 250% | 6.52% | 8.33% |
| At least 250% but less than 300% | 8.33% | 9.83% |
| At least 300% but not more than 400% | 9.83% | 9.83% |
This Applicable Percentage Table provides a sliding scale range of percentages within an applicable tier of household income to calculate an individual’s premium tax credit.
The Revenue Procedure also adjusts the percentage for plan years beginning 2021 to 9.83%. This is the percentage under IRC Section 36B(c)(2)(C)(i)(II) that is determinative of “affordability” to comply with the ACA Employer Mandate. Under this Mandate, if an employer fails to offer “Affordable” coverage to employees, the employer risks being subject to penalties under IRC Section 4980H.
