FAQ on the ACA Family Glitch Final Rule
When does it take effect?
This change will take effect on January 1, 2023, so plans that clients enroll in during the Open Enrollment Period (OEP) will reflect this change.
Does it change anything for employees?
No, employee affordability is still determined the same. The employee’s premium cannot exceed 9.5% of household income for employee-only coverage.
How does it help family members?
A new additional affordability test will be used to determine affordability for family members. Premiums for the total family must be less than 9.5% of the total household income to be considered affordable.
How will this be implemented during the enrollment process?
When a family applies for coverage on the Exchange, they will be asked which family members are offered coverage from their employer and the family members to whom the employer’s coverage offer extends. When an applicant for whom APTC (Advance Premium Tax Credit) is otherwise allowed indicates they are offered employer-sponsored coverage, the Exchange will ask for the premium for employee only coverage for the applicant and make an affordability determination based on that. When an applicant who is otherwise eligible for the APTC indicates coverage available through a family member’s employer, the Exchange will ask for the premium for family coverage and make an affordability determination based on that. This means it is possible family members would be eligible for APTC, but the employee would not.
What if the whole family wants to be on the same plan, but only the family members are eligible for the APTC?
If the whole family chooses to enroll in Exchange coverage, the APTC would be paid only for the employee’s family members but not for the employee’s coverage.
Are there any credits for out-of-pocket costs due to multiple plans?
Split coverage means multiple deductibles and maximum out-of-pocket limits for the family. This can potentially increase out-of-pocket costs. As a result, many families with offers of employer coverage who will be newly eligible for the APTC under the final regulations would not see any savings in the combined cost of out-of-pocket premiums and cost-sharing.
What does premium look like for family members?
Since the 2013 regulations were declared, the average annual employee contribution for family coverage has increased by over 30% – a growth rate nearly doubles the rate at which the Consumer Price Index increased over the same period. In 2021, the average annual employee contribution for a family plan offered by the employer was $5,969. Contributions were even higher for employees at small firms who faced an average cost of $7,710. Roughly 12 percent of workers offered health coverage would have had to pay over $10,000 to cover their entire family. Under the 2013 regulations, these families are not eligible for the PTC if the self-only coverage offer is affordable, even if the cost of family coverage exceeds their annual income. Without access to affordable coverage from their employer or the Exchange, some low- and middle-income families cannot obtain coverage and must go uninsured.