The Biden Administration Tuesday proposed a rule that would cover family members previously excluded from coverage under the Affordable Care Act (ACA) due to the “family glitch.”
The ACA, passed by the Obama Administration in 2010, allows Americans to qualify for a tax credit to purchase affordable, high-quality health insurance coverage through the ACA marketplace if that person is not provided “affordable” health insurance by their employer. Under current regulations, however, employer-based health insurance can still be deemed “affordable” even if it only provides coverage for the sole employe and not the employee’s family. Since this person is receiving “affordable” coverage under ACA regulations, that employee’s family members are ineligible to qualify for a tax credit to purchase coverage through the ACA marketplace.
According to the Biden Administration, the “family glitch” affects five million Americans. Current enrollment in the program totals 14.5 million people.
The Treasury Department and the Internal Revenue Service are proposing a rule to eliminate the glitch. Should it be approved, family members of an employee receiving affordable health care from an employer would still be eligible for the tax credit. The Biden Administration estimates that 200,000 uninsured people would gain coverage if the new rule is adopted and 1 million Americans would see their coverage become more affordable.
In announcing the proposed rule, the administration also said President Joe Biden would issue an executive order to make health care coverage more accessible and that additional action would be taken to strengthen the ACA and Medicaid.