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S.F. No. 2580 - Health care insurance premium credit (as proposed to be amended by A-1)
Author: Senator Matt Schmit
Prepared By: Nora Pollock, Senate Counsel (651/297-8066)
Date: April 7, 2016


This bill provides a refundable income tax credit for health insurance premiums paid by individuals who purchased a plan through MNSure and are not eligible for a premium tax credit under the Affordable Care Act (ACA).  Effective beginning in tax year 2016.

Under the ACA, income-eligible individuals are allowed a premium tax credit for health insurance coverage purchased through a Marketplace (i.e., MNSure) for themselves and their spouses and dependents.  Premium tax credits are not allowed for health insurance coverage purchased outside the Marketplace, or to individuals eligible to enroll in certain employer-sponsored coverage or government health coverage.  Premium tax credits are calculated based on the applicable second lowest cost plan in which the taxpayer lives.

This bill authorizes a tax credit for taxpayers who:

  • Are ineligible for government-sponsored health coverage;
  • Are ineligible for a premium tax credit under the ACA due either to:
    • income in excess of 400 percent of the federal poverty line; or
    • access to an employer-sponsored minimal essential coverage plan through a spouse’s employer where the employee’s annual premiums (including dependent coverage) exceeds 9.56 percent of the employee’s annual household income; and
  • Purchased a qualified health plan through MNSure.

            The credit amount is the difference between the annual cost of premiums for an applicable second lowest cost silver plan available to the taxpayer that covers the taxpayer, spouse, and any dependents, and 9.6 percent of the taxpayer’s annual modified adjusted gross income (generally, adjusted gross income plus tax-exempt interest).

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