REMEMBER THE "FAMILY GLITCH?"
For those who do not have access to “affordable” health insurance through an employer sponsored group plan, The Affordable Care Act (ACA) provides tax credits – depending on income – to subsidize the purchase of individual plans through The Marketplace.
“Affordability” was set at 9.5% of household income; i.e., an ALE (Applicable Large Employer) had safe harbor from ACA penalties if it paid > 90.5 % of the single premium and if not, the employee qualifies for Marketplace subsidies.
See the problem?
Dependents were not eligible for Marketplace tax subsidies so long as the employee (only) cost was ‘affordable.’
That's was the “glitch.
In a big announcement Tuesday, IRS issued a final rule (Notice 2022-41) with a fix effective January 1,
2023. Nice timing; the Open Enrollment Period (OEP) starts November 1st.
Note the safe harbor threshold for ALE’s is not changing. (Phew!)
And speaking of ‘glitches,’ remember how dysfunctional the Marketplace was when it first went on
line October of 2013? At Healthcare.gov they have just just days to revise applications and include questions about employer-sponsored coverage for family members.
What could go wrong?
