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How The Family Glitch Proposed Rule Changes Could Save You Money

In April 2022, the Biden-Harris Administration proposed a rule to strengthen the Affordable Care Act (ACA) by fixing the ‘family glitch’ that could save families across America hundreds of dollars each month.

The goal of this proposed rule is to revise the existing interpretation of eligibility relating to premium tax credits for families. If finalized, the rule will extend the ACA Marketplace health insurance subsidies to millions more people throughout America, including many North Carolina residents.

HealthPlans of NC

Health Plans of NC, Kelly Quinn

How the current rule works

Under the ACA, anyone who doesn’t have access to ‘affordable’ health insurance via their employer may qualify for a premium tax credit to buy affordable, high-quality coverage on the health insurance Marketplace.

Currentlyaffordability is assessed on employee-only coverage. It doesn’t take into account total household income. So long as the employer’s lowest self cost premium is less than 9.61% of household income, then the coverage, which includes family coverage, is considered ‘affordable.’ Affordability is based on self cost, not what it costs for the family, which could be well over 9.61%.  Because it’s been deemed ‘affordable,’ family members of the employee aren’t eligible to receive the premium tax credit. This ‘family glitch’ affects around five million people, making it impossible for them to use tax credits to buy affordable and high-quality health insurance via the Marketplace.

What the changes will mean for North Carolinians

The proposed regulations aim to add a new affordability measurement to include family members based on household income. If the group health plan for family coverage, including spouse and dependents, doesn’t fall within the 9.61% of total household income, then it will be classified as ‘not affordable’ for spouse and dependents, meaning they can receive a tax credit.

If the changes are introduced, approximately 200,000 insured people will be expected to gain coverage, and nearly one million Americans will see their coverage become more affordable. Many families in North Carolina will save hundreds of dollars each month with lower premiums, making it easier to keep the coverage you need for your family.

Choosing the right health insurance

If you have any questions about these proposed changes and how they might affect you, our locally based health insurance agents NC can help. We can research the best family health insurance for you and your family and ensure you’re getting the coverage you need. So get in touch with our knowledgeable team today to discuss health insurance plans for family.

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