Establishing a state-based health insurance subsidy, and making an appropriation

This bill establishes a state-based health insurance subsidy to mitigate the impact of the reduction in federal health insurance subsidies. §36B(3)(A) (federal credit) expired on January 1, 2026. The federal credit was an expansion of the subsidies provided under the federal Patient Protection and Affordable Care Act, also known as the ACA. For the 2026 tax year only, the bill replaces the expired federal credit with a state subsidy of equal value as the federal credit calculated during the 2025 tax year. The bill requires the department of health and human services (department) and the department of insurance and financial services to cooperate and develop an internet site to be located on the internet site of the department to effectuate the bill. Beginning July 1, 2026, a person who is a resident of this state may submit an application to the department in a manner specified by the department. The application shall include identical information submitted by a person as if applying for health insurance coverage under the federal Patient Protection and Affordable Care Act, Pub. L. 111-148. Upon approval of the application by the department, an amount equal to the enhanced premium tax credit the person would have received as if the enhanced premium tax credit did not expire shall be provided to the person to offset the cost of the health insurance coverage. The amount provided may be retroactive to January 1, 2026, if the person qualified for such credits, or to the date the person would have qualified for enhanced premium tax credits in tax year 2026, whichever is earlier. The bill creates an Iowa benefit exchange fund (fund) in the state treasury under the control of the department for the sole purpose of providing subsidies to persons whose applications have been approved pursuant to the bill. For FY 2026-2027, the bill appropriates from the general fund of the state an amount sufficient to implement the bill.