A BILL to amend the Code of Virginia by adding in Chapter 3 of Title 58.1 an article numbered 3.1, consisting of sections numbered 58.1-339.15, 58.1-339.16, and 58.1-339.17, relating to Health Insurance Premium Stabilization Tax Credit Act.
HB405 creates the Health Insurance Premium Stabilization Tax Credit Act and adds a new article to Virginia’s income tax code. The bill would allow certain taxpayers who buy coverage through the Virginia Health Benefit Exchange to claim a refundable state income tax credit equal to a certified portion of their health insurance premiums. To qualify, a taxpayer must be enrolled in a qualified health plan through the Exchange and have Virginia adjusted gross income above 400 percent of the federal poverty guidelines.
The credit is designed to cap a household’s premium burden by comparing the actual monthly premium to the cost of the second-lowest-cost silver plan in the taxpayer’s rating area, reduced by 8.5 percent of Virginia adjusted gross income divided by 12. The State Corporation Commission’s Division of the Health Benefit Exchange would calculate each taxpayer’s certifiable premium and report it to the Department of Taxation, while the Tax Commissioner would administer the credit and issue refunds if the credit exceeds tax liability. The credit would apply to taxable years beginning on or after January 1, 2026, and before January 1, 2031.
HB405 would amend Title 58.1 of the Code of Virginia by creating a new refundable individual income tax credit tied to health insurance premiums purchased through the state Exchange. It would affect taxpayers with incomes above 400 percent of the federal poverty level who enroll in Exchange coverage, including married taxpayers filing separately, and would require coordination between the State Corporation Commission’s Health Benefit Exchange Division and the Department of Taxation. The bill would also require the Tax Commissioner to issue administrative guidelines, exempting those guidelines from the Administrative Process Act.
The available record shows no committee transcript, floor debate, or vote history, so there is no documented public sentiment in the provided materials. Based on the bill’s structure, it appears intended as a consumer affordability measure aimed at stabilizing premium costs for Exchange enrollees, but the legislative record here does not show whether that goal was broadly supported or opposed. The bill was referred to the House Committee on Finance and was left in Finance, indicating it did not advance from committee in the available action history.
No specific points of contention are documented in the provided transcripts or votes. Potential areas of debate inherent in the bill include the cost of a refundable tax credit to the Commonwealth, the decision to limit eligibility to taxpayers above 400 percent of poverty, and the use of a premium formula tied to the second-lowest-cost silver plan and an 8.5 percent income benchmark. The bill also centralizes administrative authority in the Tax Commissioner and the Exchange Division, which could raise questions about implementation and oversight, but no explicit objections are recorded in the supplied materials.