Family Glitch Solution Proposed
The Biden Administration announced today that it would release a proposed rule to fix the family glitch. This proposed rule is a result of President Biden’s Executive Order from 2021 calling on the federal agencies to strengthen the Affordable Care Act. The Department of Treasury is using the proposed rule to revise the definition of “affordability” of employer sponsored coverage as it applies specifically to family members of the employee.  

Current regulations define employer-based health insurance as “affordable” if the coverage solely for the employee, not for family members, is affordable, making family members ineligible for a premium tax credit. The proposed changes would allow for the family members of workers who are offered affordable self-only coverage but unaffordable family coverage to qualify for premium tax credits in the exchange. The change, however, would not allow the employee to access a premium tax credit if the employee’s offer of coverage from the employer is deemed affordable under the current standards.  

Under the proposal, the earliest this change would be enacted would be January 1, 2023. We will be providing comments on the proposed rule and we will update you as this change makes its way through the rulemaking process.