Today the federal government announced a proposal to fix what is known as the “family glitch” as it pertains to employer group health insurance coverage. Specifically, the administration wants to change the definition of “affordable” coverage for family members.
As it stands, dependents on an employer group health insurance plan do not qualify for a premium tax credit. Today, the federal government determines a group plan as being affordable based solely on the employee premium rate, not the employee and family premium rate. As such, dependents cannot shop on the health insurance exchange for a less expensive option, and possibly receive a reduced premium rate on an individual policy through the premium tax credit. The proposal would change this, allowing family members that qualify to receive a tax credit when shopping on the exchange.
January 1, 2023 is the earliest the proposal would go into effect. But first there must be public hearings.