This bill establishes a state-based health insurance subsidy in Iowa to address the reduction in federal health insurance subsidies that will occur after the 2025 tax year. It creates the Iowa benefit exchange fund, which will be managed by the department of health and human services, to provide subsidies to eligible residents. The fund will be used exclusively for this purpose and will not be subject to certain state financial regulations. The bill also mandates the cooperation of the department and the department of insurance and financial services to develop an internet site to facilitate the application process for these subsidies.

Beginning July 1, 2026, residents can apply for the subsidy, which will be equivalent to the enhanced premium tax credit that expired on January 1, 2026. The application process will require information similar to that needed for health insurance coverage under the federal Patient Protection and Affordable Care Act. Upon approval, individuals will receive an amount equal to the enhanced premium tax credit they would have received had it not expired, with the possibility of retroactive payments starting from January 1, 2026. The bill includes an appropriation from the state’s general fund for the fiscal year 2026-2027 to support the implementation of this subsidy program.