Biden-Harris Administration Proposed Rule to fix ACA's "Family Glitch"

For the 12th Anniversary of the former President Obama’s signing the Affordable Care Act into law, the Biden-Harris Administration is taking action in bolstering the ACA to help lower costs for families needing coverage.

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One proposal the Biden-Harris Administration announced this week was a rule to combat the “Family Glitch” that consists within the Affordable Care Act. This “glitch” affects 5 million people and has made it impossible for families to use premium tax credits to purchase an affordable, high-quality Marketplace plan.

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Under the ACA, people who do not have access to “affordable” health insurance through their employment may qualify for a premium tax credit to purchase affordable, high-quality coverage on the ACA’s health insurance marketplaces.

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The issue creating the “family glitch” is that employer-based health insurance is considered “affordable” if the coverage solely for the employee is considered affordable. But that does not take into account if that coverage is “affordable” for family members. This makes family members ineligible for a premium tax credit even though they need it to afford high-quality coverage through the Marketplace. For family members of an employee offered health coverage through an employer, the cost of that family coverage can sometimes be very expensive and make health insurance out of reach.

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So the rule that the Biden-Harris Administration is proposing would fix this by making it so that family members of workers who are offered affordable self-only coverage but unaffordable family coverage may qualify for premium tax credits to buy ACA coverage. The Administration estimates that 200,000 uninsured would gain coverage through this proposal, along with nearly 1 million Americans who would see their insurance become more affordable.

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According to a senior administration official, President Biden will sign an executive order directing agencies to do everything within their power to make health care more accessible and affordable. The rule would go into effect January 2023.

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