On June 6, United States of Care submitted comments to the Internal Revenue Service (IRS) in support of a proposal to address the affordability of employer coverage for family members of employees.
We know that people want a system in which their care is affordable, their coverage is dependable, their care is personalized, and the system is understandable. Yet, when we talk to people, we learn that they struggle to secure and retain dependable coverage that allows them to live the lives they want to lead. Over two years of research, people told us they wanted policies that would provide security and freedom in their health care coverage as life changes. Promoting access to that kind of dependable coverage means allowing people to use tax credits to get coverage outside of their employer if their employer coverage is too expensive, doesn’t meet their needs, or doesn’t extend to family members.
Around 5 million people currently face barriers to accessing affordable, subsidized marketplace coverage because of the way that policymakers define whether people’s coverage is affordable. It’s an issue known as the “Family Glitch.” Those affected are relatives of people who get insurance through their employers, but who are ineligible for subsidies.
The current policy defines whether coverage is affordable by the price their family member pays. If their employer-sponsored insurance isn’t very expensive, that person’s family can be denied help to afford their own coverage — because the family’s coverage is deemed affordable, based only on the employee’s cost.
That means that if a single member of a family has inexpensive insurance through their employer — and that insurance isn’t adequate for the rest of the family — the rest of the family aren’t eligible for subsidies to help them get covered through Exchange plans.
The new proposal would consider the employee’s total cost of employer-sponsored insurance for themselves and their family, which will result in a fairer calculation of whether the entire family is eligible for subsidies.
The ramifications of the change can be large: An estimated 200,000 individuals will gain coverage under the proposed policy change, and close to 1 million people will pay less for their health insurance.
We commend the IRS for issuing this proposed rule, which strongly aligns with people’s goals for the system, which are wrapped into our United Solutions for Care. We know that people need the certainty they can afford their care and coverage that’s dependable. Fixing the Family Glitch is a major step toward both of those goals.