n-20-66.pdf

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Guidance regarding the premium tax credit and Medicaid coverage of COVID-19 testing
and diagnostic services

Notice 2020-66

SECTION 1. PURPOSE
This notice provides interim guidance addressing whether certain Medicaid
coverage of Coronavirus Disease 2019 (COVID-19) testing and diagnostic services is
minimum essential coverage for purposes of the premium tax credit under section 36B
of the Internal Revenue Code (Code). This notice also announces that the Department
of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to
amend § 1.5000A-2 of the Income Tax Regulations to add Medicaid coverage of
COVID-19 testing and diagnostic services to the list of health care coverage that is not
minimum essential coverage under a government-sponsored program.
SECTION 2. BACKGROUND
Section 6004(a)(3) of the Families First Coronavirus Response Act (Families
First Act), Pub. L. No. 116-127, 134 Stat. 178 (March 18, 2020), authorizes states to
provide COVID-19 testing and diagnostic services to uninsured individuals under the
Medicaid program in Title XIX of the Social Security Act.
Beginning in 2014, under the Patient Protection and Affordable Care Act, Public
Law 111-148 (124 Stat. 119 (2010)), and the Health Care and Education Reconciliation

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Act of 2010, Public Law 111-152 (124 Stat. 1029 (2010)) (collectively, PPACA), eligible
individuals who purchase coverage under a qualified health plan through a Health
Insurance Exchange (Exchange) established under section 1311 of the PPACA may
claim a premium tax credit under section 36B. Section 36B and § 1.36B-3(a) of the
Income Tax Regulations provide that a taxpayer is allowed a premium tax credit only for
months that are coverage months for individuals in the taxpayer’s family, as defined in
§ 1.36B-1(d). Under § 1.36B-3(c)(1)(ii), a coverage month for an individual includes
only those months the individual is not eligible for minimum essential coverage, except
coverage in the individual market.
Minimum essential coverage is defined in section 5000A(f) of the Code and
generally includes coverage under government-sponsored programs, including
Medicaid coverage under title XIX of the Social Security Act. However, the Treasury
Department and the IRS have determined that certain health care coverage providing
limited benefits is not minimum essential coverage under a government-sponsored
program. See § 1.5000A-2(b)(2).
SECTION 3. INTERIM GUIDANCE
The Treasury Department and the IRS have determined that Medicaid coverage
limited to COVID-19 testing and diagnostic services under section 6004(a)(3) of the
Families First Act is not minimum essential coverage under a government-sponsored
program. Thus, an individual’s eligibility for this coverage for one or more months does
not prevent those months from qualifying as coverage months for purposes of
determining eligibility for the premium tax credit under section 36B.

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SECTION 4. EFFECTIVE/APPLICABILITY DATE
This notice applies to taxable years beginning in or after 2020. Until further
guidance is issued, taxpayers may rely on the interim guidance described in this notice.
Pursuant to Section IV. of the Policy Statement on the Tax Regulatory Process
issued by the Treasury Department and the IRS on March 5, 2019, if no proposed
regulations or other guidance is released within 18 months after [INSERT DATE THAT
NOTICE IS PUBLISHED IN THE INTERNAL REVENUE BULLETIN], taxpayers may
continue to rely on the interim guidance described in this notice but, until additional
guidance is issued, the Treasury Department and the IRS will not assert a position
adverse to any taxpayer, including an applicable large employer under section 4980H,
based in whole or in part on this notice.
SECTION 5. DRAFTING INFORMATION
The principal author of this notice is Steve Toomey of the Office of Chief Counsel
(Income Tax and Accounting). For further information regarding this notice, contact
Steve Toomey at 202-317-4718 (not a toll-free number).