Family Glitch Fix: Rule Change Makes ACA Premium Tax Credits Available to 5 Million More Families
As the Affordable Care Act rolls into its 10th year, a much-needed fix is taking effect that will make better or more affordable coverage available to millions more Americans. Starting in 2023, eligibility rules will recognize that, even if the premium for employer-sponsored coverage for an employee alone falls in the “affordable” range, coverage for the whole family under the same plan may not be affordable at all.
Previously, if one member of a family had access to “affordable” coverage (costing less than 9.6% of a family’s total income), then no one in the household could quality for the ACA’s premium tax credit, which helps pay for coverage through the Healthcare.gov Marketplace. That was true even though, according to the American Medical Association, the average employee contribution for self-only coverage in 2020 was $1,243 while the average contribution for family coverage was $5,588.
A new US Department of the Treasury regulation known as the “family glitch fix,” finalized in October 2022, has changed the rules. Under it, the affordability test will now include the cost of the family coverage that is offered. A brief published by The Kaiser Family Foundation on April 7th, 2021 estimated that 5.1 million people were impacted by the family glitch. Starting in plan year 2023, those individuals will now have new, potentially more affordable options on the Marketplace. This will truly be life changing for some.
Here is a scenario that played out for Navigators across the state before the family glitch fix: A married couple with an offer of employer coverage and a household income of $30,000 per year was not eligible for Medicaid. For a family at that income to get a premium tax credit on the Marketplace, the cost of self-only, employer-sponsored coverage had to be more than $240 per month. In this scenario, if an employer offered the working spouse a self-only plan for less than $240 per month, no one in the household was eligible for tax credits through the Marketplace, no matter how much the employer-offered family coverage cost.
The family glitch fix could allow this married couple to qualify for premium tax credits (PTC) and shop for affordable coverage on the Marketplace, if family coverage is “unaffordable”.
Helping connect low-income families with public benefits, including SNAP, WIC, and health care coverage has become a central part of our mission. At many foodbanks, public benefit enrollment experts are on staff are ready to help people who come for emergency food.
The federal Centers for Medicare and Medicaid Services (CMS), recognizing the importance of this service, has awarded the Ohio Association of Foodbanks a grant to provide health insurance Navigator services throughout the state. Navigators are federally trained and licensed by the Ohio Department of Insurance to help people understand their coverage options, apply for financial help, and use their health insurance. All services are unbiased and completely free of charge. Services are available in-person, online, over the phone, and in multiple languages.
We want you to help spread the word about the family glitch fix. If you, your employer partners, or others you know might benefit from the rule change, schedule an appointment today by calling (833) 628-4467 or visit GetCoveredOhio.org. Open enrollment is happening now through January 15, 2023.
Zach Reat is director of health initiatives and Grace Wagner is health insurance program director for The Ohio Association of Foodbanks. It is Ohio’s largest charitable response to hunger, representing Ohio’s 12 Feeding America foodbanks and their 3,600 member hunger relief agencies, including food pantries, soup kitchens, homeless shelters, and supplemental feeding programs. Our mission is to provide food and other resources to people in need and to pursue areas of common interest for the benefit of people in need.