To be eligible for subsidized qualified health plans today, employees must not have "affordable coverage" through their own/spouse's employer. For some, if their employer doesn’t contribute to the cost (or only contributes a small amount) toward the family premium, it may be unaffordable for the employee to purchase health insurance for their family. However, these same employees would not be eligible for NY’s subsidized qualified health plans or the Applied Tax Premium Credit (APTC) subsidy today, because they are offered "affordable coverage" through their own/spouse's employer. This scenario is known as the “Family Glitch.”
The Internal Revenue Service and Department of Treasury recently issued a fix, known as the Family Glitch Rule:
- If an employee must pay more than 9.12% of household income towards the premium for a family plan, the plan is considered unaffordable, and the employee's family member(s) may qualify for financial assistance.
- Family members will no longer be determined ineligible for APTC financial assistance if the employee has an offer of affordable employee-only health care coverage
What Does This Mean for you?
This fix is important to understand because savvy employers may bring it to your attention, or brokers could use this as a competitive edge in the marketplace when competing for business. Most importantly, it gives us the opportunity to provide coverage for these uninsured families and not lose them to our competition.
The new Family Glitch Rule goes into effect January 1, 2023.