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FACT SHEET: Biden Harris Administration Proposes Rule to Fix “Family Glitch” and Lower Health Care Costs

Today, the Biden-Harris Administration is proposing a rule to strengthen the ACA by fixing the “family glitch,” which would save hundreds of thousands of families hundreds of dollars a month.

Under the ACA, people who do not have access to “affordable” health insurance through their jobs may qualify for a premium tax credit to purchase affordable, high-quality coverage on the ACA’s health insurance marketplaces. Current regulations define employer-based health insurance as “affordable” if the coverage solely for the employee, and not for family members, is affordable, making family members ineligible for a premium tax credit even though they need it to afford high-quality coverage through the Marketplace.  For family members of an employee offered health coverage through an employer, the cost of that family coverage can sometimes be very expensive and make health insurance out of reach. The “family glitch” affects about 5 million people and has made it impossible for many families to use the premium tax credit to purchase an affordable, high-quality Marketplace plan.

The Treasury Department and the Internal Revenue Service are proposing to eliminate the “family glitch.” Should today’s proposed rule be finalized, family members of workers who are offered affordable self-only coverage but unaffordable family coverage may qualify for premium tax credits to buy ACA coverage. Should the proposed change be made, it’s estimated that 200,000 uninsured people would gain coverage, and nearly 1 million Americans would see their coverage become more affordable. Many families would be able to save hundreds of dollars a month thanks to lower premiums. This proposed rule would amount to the most significant administrative action to improve implementation of the ACA since its enactment.
IRS proposed rule--Affordability of Employer Coverage for Family Members of Employees (comments due June 6, 2022): https://www.federalregister.gov/d/2022-07158

A public hearing has been scheduled for Monday, June 27, 2022, at 10:00 a.m. EDT. The IRS must receive speakers' outlines of topics to be discussed at the public hearing by Monday, June 13, 2022. If no outlines are received by Monday, June 13, 2022, the public hearing will be cancelled.

2) Executive Order on Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage

Sec. 2.  Agency Responsibilities.  In addition to taking the actions directed pursuant to Executive Order 14009, agencies . . . with responsibilities related to Americans’ access to health coverage shall review agency actions to identify ways to continue to expand the availability of affordable health coverage, to improve the quality of coverage, to strengthen benefits, and to help more Americans enroll in quality health coverage.  As part of this review, the heads of such agencies shall examine the following:

(a)  policies or practices that make it easier for all consumers to enroll in and retain coverage, understand their coverage options, and select appropriate coverage;

(b)  policies or practices that strengthen benefits and improve access to healthcare providers;

(c)  policies or practices that improve the comprehensiveness of coverage and protect consumers from low-quality coverage;

(d)  policies or practices that expand eligibility and lower costs for coverage in the ACA Marketplaces, Medicaid, Medicare, and other programs;

(e)  policies or practices that help improve linkages between the healthcare system and other stakeholders to address health-related needs; and

(f)  policies or practices that help reduce the burden of medical debt on households.


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