Biden Proposes Fix to the Family Glitch
A fix to the long-standing “Family Glitch” has been proposed by President Biden. The so-called glitch stopped some family members from being able to get marketplace insurance and assistance if they had access to employer-based coverage that was technically affordable under the ACA rules but not practically affordable.
The law as written said that each family member’s individual coverage offered by an employer had to cost more than very roughly 10% of taxable income. This could result in a situation where family members would pay much more for coverage through an employer than they would through the marketplace. And this can and has in practice led to many remaining without coverage.
The proposed fix seems to offer tax credits to the whole family if the whole family’s coverage costs more than 10%, instead of each member’s coverage being viewed individually. This will bring things more in line with how families are treated in the marketplace itself and will effectively fix the family glitch.
So, how will it work if two or more family members are offered health insurance for them as an employee and insure other family members? What happens when one has employer health insurance considered affordable for the family but the other one does not? What are the ramifications?
Great question, I couldn’t find the answer stated specifically. But I’ll keep looking. Here is the final rule: https://www.federalregister.gov/documents/2022/10/13/2022-22184/affordability-of-employer-coverage-for-family-members-of-employees
I would conclude based on what I have read however that it is the total amount of employees’ share of premiums against total household income for family members. So basically one would combine both numbers for the purposes of getting marketplace assistance. For the employer, clearly, the employer offering the more expensive plan that averaged up the total amount is “at fault.”