Dental Groups Continue Push for Dental Tax Credit Fix

By the CDHP team

As the new health insurance marketplaces prepare for open enrollment starting October 1, dental groups continue to urge the IRS to fix a glitch in the Affordable Care Act (ACA) that may make it more difficult for families to purchase dental benefits for their children. The Children's Dental Health Project, along with the American Dental Association, the National Association of Dental Plans, and the Delta Dental Plans Association sent a letter yesterday to Secretary of Treasury Jack Lew, urging him to ensure that the law's premium tax credits apply to pediatric dental benefits, regardless of how a family purchases their children's dental coverage.

While pediatric dental coverage is part of the ACA's Essential Health Benefits, the subsidy many families will receive to help the buy insurance may not be enough to cover the cost of stand-alone dental coverage as a result of how the IRS will calculate the tax credit amounts. Under current IRS policy, the size of a family's premium tax credit is determined according to the cost of a benchmark health plan but does not factor in the cost of dental coverage purchased separately. In many states families may not be able to purchase pediatric dental benefits as part of their health plan, leaving them with a tax credit only large enough to support the purchase of health coverage.

The letter to Secretary Lew echos previous communications to the Department of Treasury, noting that the IRS could easily change its interpretation to apply the tax credits as Congress intended without re-writing the current rules. Accompanying the letter is a legal analysis detailing the law's intent and the avenues available to address this issue. If families are unable to access the full tax credit amount to which they are entitled, they may be persuaded to forego the purchase of a critical piece of their children's coverage.

Read the letter here.

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