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Fix ACA required contribution percentage to be flat below 133% FPL (#7067)
* Fix ACA required contribution percentage to be flat below 133% FPL Fixes #7066 The ACA statute (26 USC 36B) specifies that the contribution percentage for household income "up to 133%" should be flat (initial=final=2%), not interpolated. The implementation was using np.interp which linearly interpolated from 0% to 133% FPL. This fix adds a threshold at 132.9999% FPL with the same rate as 0% FPL, creating the flat portion before the jump at 133%. Changes: - Add threshold at 1.329999 for 2015 and 2026 periods (null for ARPA/IRA) - Add tests verifying flat rate at 100% and 120% FPL - Add test verifying jump to 3.14% at 133% FPL 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude <noreply@anthropic.com> * Add changelog entry for ACA required contribution percentage fix 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <noreply@anthropic.com> * Refactor ACA contribution percentage to separate thresholds and rates Splits the single required_contribution_percentage parameter into three independent parameters: - threshold.yaml: FPL bracket boundaries - initial.yaml: starting rate for each bracket - final.yaml: ending rate for each bracket This properly handles flat brackets (like 0-133% FPL where initial=final) per 26 USC 36B, rather than relying on np.interp which incorrectly interpolated across the entire range. 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <noreply@anthropic.com> * Update uv.lock * Update uv.lock with --upgrade * Move changelog entry to changelog_entry.yaml for CI * Use PolicyEngine conventions for vectorized operations - Replace np.clip with clip - Replace np.where with where - Replace np.minimum with min_ - Upgrade uv.lock 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <noreply@anthropic.com> --------- Co-authored-by: Claude <noreply@anthropic.com>
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‎changelog_entry.yaml‎

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- bump: patch
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changes:
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fixed:
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- ACA required contribution percentage now correctly handles flat brackets (e.g.,
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0-133% FPL) per 26 USC 36B by separating thresholds, initial rates, and final
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rates into independent parameters.

‎policyengine_us/parameters/gov/aca/required_contribution_percentage.yaml‎

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‎policyengine_us/parameters/gov/aca/required_contribution_percentage/final.yaml‎

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description: Final (ending) contribution percentage for each ACA bracket.
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metadata:
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unit: /1
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label: ACA contribution percentage - final rate per bracket
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reference:
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- title: 26 U.S. Code § 36B(b)(3)(A) - Refundable credit for coverage under a qualified health plan
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href: https://www.law.cornell.edu/uscode/text/26/36B#b_3_A
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- title: IRS Revenue Procedure 2025-25 - Applicable percentage table for 2026
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href: https://www.irs.gov/pub/irs-drop/rp-25-25.pdf
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values:
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# Original ACA (2015-2020): 6 brackets
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2015-01-01:
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- 0.02 # 0-133%: flat 2%
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- 0.04 # 133-150%
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- 0.063 # 150-200%
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- 0.0805 # 200-250%
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- 0.095 # 250-300%
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- 0.095 # 300-400%: flat 9.5%
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# ARPA/IRA (2021-2025): 5 brackets, no 133% threshold
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2021-01-01:
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- 0 # 0-150%: flat 0%
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- 0.02 # 150-200%
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- 0.04 # 200-250%
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- 0.06 # 250-300%
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- 0.085 # 300-400%
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# Post-ARPA (2026+): return to 6 brackets
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2026-01-01:
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- 0.021 # 0-133%: flat 2.1%
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- 0.0419 # 133-150%
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- 0.066 # 150-200%
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- 0.0844 # 200-250%
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- 0.0996 # 250-300%
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- 0.0996 # 300-400%: flat 9.96%

‎policyengine_us/parameters/gov/aca/required_contribution_percentage/initial.yaml‎

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description: Initial (starting) contribution percentage for each ACA bracket.
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metadata:
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unit: /1
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label: ACA contribution percentage - initial rate per bracket
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reference:
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- title: 26 U.S. Code § 36B(b)(3)(A) - Refundable credit for coverage under a qualified health plan
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href: https://www.law.cornell.edu/uscode/text/26/36B#b_3_A
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- title: IRS Revenue Procedure 2025-25 - Applicable percentage table for 2026
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href: https://www.irs.gov/pub/irs-drop/rp-25-25.pdf
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values:
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# Original ACA (2015-2020): 6 brackets
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2015-01-01:
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- 0.02 # 0-133%: flat 2%
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- 0.03 # 133-150%
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- 0.04 # 150-200%
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- 0.063 # 200-250%
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- 0.0805 # 250-300%
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- 0.095 # 300-400%: flat 9.5%
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# ARPA/IRA (2021-2025): 5 brackets, no 133% threshold
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2021-01-01:
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- 0 # 0-150%: flat 0%
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- 0 # 150-200%
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- 0.02 # 200-250%
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- 0.04 # 250-300%
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- 0.06 # 300-400%
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# Post-ARPA (2026+): return to 6 brackets
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2026-01-01:
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- 0.021 # 0-133%: flat 2.1%
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- 0.0314 # 133-150%
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- 0.0419 # 150-200%
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- 0.066 # 200-250%
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- 0.0844 # 250-300%
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- 0.0996 # 300-400%: flat 9.96%

‎policyengine_us/parameters/gov/aca/required_contribution_percentage/threshold.yaml‎

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description: FPL thresholds for ACA required contribution percentage brackets.
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metadata:
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unit: /1
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label: ACA contribution percentage bracket thresholds
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reference:
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- title: 26 U.S. Code § 36B(b)(3)(A) - Refundable credit for coverage under a qualified health plan
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href: https://www.law.cornell.edu/uscode/text/26/36B#b_3_A
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- title: IRS Revenue Procedure 2025-25 - Applicable percentage table for 2026
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href: https://www.irs.gov/pub/irs-drop/rp-25-25.pdf
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values:
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2015-01-01:
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- 0
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- 1.33
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- 1.50
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- 2.00
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- 2.50
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- 3.00
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- 4.00
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# ARPA/IRA years: no 133% threshold, brackets shift
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2021-01-01:
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- 0
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- 1.50
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- 2.00
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- 2.50
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- 3.00
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- 4.00
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# Post-ARPA: return to original structure
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2026-01-01:
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- 0
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- 1.33
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- 1.50
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- 2.00
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- 2.50
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- 3.00
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- 4.00

‎policyengine_us/tests/policy/baseline/gov/aca/ptc/aca_required_contribution_percentage.yaml‎

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- name: Flat at 100% FPL in 2026 (should be 2.1%, not interpolated)
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period: 2026
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absolute_error_margin: 0.0001
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input:
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aca_magi_fraction: 1.0
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output:
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aca_required_contribution_percentage: 0.021
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- name: Flat at 120% FPL in 2026 (should still be 2.1%)
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period: 2026
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absolute_error_margin: 0.0001
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input:
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aca_magi_fraction: 1.2
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output:
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aca_required_contribution_percentage: 0.021
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- name: Jump to 3.14% at 133% FPL in 2026
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period: 2026
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absolute_error_margin: 0.0001
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input:
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aca_magi_fraction: 1.33
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output:
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aca_required_contribution_percentage: 0.0314
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- name: Flat at 100% FPL in 2019 (pre-ARPA, should be 2%)
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period: 2019
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absolute_error_margin: 0.0001
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input:
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aca_magi_fraction: 1.0
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output:
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aca_required_contribution_percentage: 0.02
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- name: aca_required_contribution_percentage unit test 1
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period: 2022
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absolute_error_margin: 0.00001

‎policyengine_us/variables/gov/aca/ptc/aca_required_contribution_percentage.py‎

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def formula(tax_unit, period, parameters):
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magi_frac = tax_unit("aca_magi_fraction", period)
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p = parameters(period).gov.aca.required_contribution_percentage
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return np.interp(magi_frac, p.thresholds, p.amounts)
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# Get bracket boundaries and rates
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thresholds = np.array(p.threshold)
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initial_rates = np.array(p.initial)
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final_rates = np.array(p.final)
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# Find which bracket each household falls into
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# searchsorted returns index where magi_frac would be inserted
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# subtract 1 to get the bracket index (clamped to valid range)
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# Note: there are len(thresholds)-1 brackets (rate arrays are 1 shorter than thresholds)
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bracket_idx = clip(
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np.searchsorted(thresholds, magi_frac, side="right") - 1,
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0,
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len(initial_rates) - 1,
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)
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# Get bracket boundaries for interpolation
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bracket_start = thresholds[bracket_idx]
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# For the last bracket, use a dummy end value (won't affect result since initial=final)
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# Need to use min_ to avoid index errors with vectorized operations
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next_idx = min_(bracket_idx + 1, len(thresholds) - 1)
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bracket_end = where(
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bracket_idx < len(thresholds) - 1,
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thresholds[next_idx],
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bracket_start + 1, # Dummy value for last bracket
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)
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# Calculate position within bracket (0 to 1)
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bracket_width = bracket_end - bracket_start
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position = where(
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bracket_width > 0,
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(magi_frac - bracket_start) / bracket_width,
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0,
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)
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position = clip(position, 0, 1)
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# Interpolate between initial and final rates
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initial = initial_rates[bracket_idx]
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final = final_rates[bracket_idx]
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return initial + position * (final - initial)

‎uv.lock‎

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