The Health Insurance Premium Tax Credit was established September 21, 2006 as a tax credit for participating health insurance companies against their health insurance premium tax liability for enrolling individuals or small businesses not previously covered by health insurance. The amount of the tax credit ($1,000 for single coverage and $3,000 for family coverage or 50% of the annual health insurance premium, whichever is less) is passed on to the individual or small business in the form of reduced health insurance premiums.
Applicants must obtain health insurance coverage within 90 days from the date the Certificate of Eligibility was issued or the certificate will expire and a second certificate cannot be reissued. Individuals and small businesses can participate in the program for a maximum of three years. Below is the detailed implementation procedures adopted by the Arizona Department of Revenue (ADOR) to administer this legislation.
1.) Individuals and small businesses wanting to apply for a Certificate of Eligibility can obtain an application from ADOR. Applications and instructions are available on the web-site (www.azdor.gov under the Tax Credits link). Applications must be mailed to the post office box listed on the application.
2.) After reviewing the application, ADOR will issue a Certificate of Eligibility to a qualified individual or small business on a first come, first served basis unless the $5 million maximum credit limit per calendar year has been reached.
3.) If there is insufficient money under the $5 million credit limit, ADOR will notify the qualified applicant they have been placed on a waiting list. When money becomes available, a Certificate of Eligibility will be issued. Money must become available and a Certificate of Eligibility issued prior to obtaining health insurance coverage in order to remain eligible to participate in the program.
4.) Health insurance must be obtained within 90 days from the date the Certificate of Eligibility was issued or the Certificate will expire. Regardless of whether an application for health care coverage is in process, the Certificate will expire if a health insurance company has not approved the application and issued health care coverage within 90 days. The 90 day time period to obtain health insurance cannot be extended for any reason. Furthermore, the applicant is not eligible to reapply and receive a second Certificate of Eligibility.
5.) The health insurance company must notify ADOR by the 15th day of the month following commencement of health insurance coverage the amount of premium tax credit they intend to claim by submitting a Notification of Health Insurance Coverage form.
6.) For a small business, the final credit amount will be based on the actual number of employees enrolled on the effective date of coverage but cannot exceed the amount shown on the Certificate of Eligibility. The amount reserved under the $5 million cap will be adjusted and made available for new applicants if fewer employees obtain coverage than what was originally set aside.
7.) If notification is not received from the insurer by the 15th day of the month after commencement of coverage, ADOR will consider the Certificate invalid and release the amount reserved for new applicants. ADOR will allow 170 days from the date on the Certificate of Eligibility to declare that the Certificate is invalid.