America's Benefit Specialist October 2022

EMPLOYERS SHOULD BE

AWARE OF THE FAMILY GLITCH

By Scott M. Stevens, RHU Dodge Partners Insurance Omaha, Nebraska sstevens@dodgepartners.com

currently receive a subsidy ( source: Kaiser Family Foundation, Aug. 11, 2022 ). Suffice to say, the combination of the family glitch fix and the expanded subsidies will allow millions of Americans to afford individual health insurance coverage. The original qualifier for ACA subsidies was based on income relative to the Federal Poverty Level (generally those making between 100% and 400% of the FPL). The current, and now extended through 2025, qualifier replaces it with a more generous and easier obtainable income threshold. Go ing forward, those whose quoted cost of in dividual coverage for a so-called silver level plan exceeds 8.5% of their gross income are eligible for a subsidy. As an example, under the original ACA subsidy criteria, a 40-year-old couple making $25,000 per year would pay $76 per month for coverage, factoring for their sub sidy. With the expansion, this same couple would pay $0 premium, and save $915 in just one year!

One of the chief aims of the Affordable Care Act was to address the challenge associated with finding and purchasing affordable indi vidual health insurance, for those that have no other option for coverage. Some might recall when there was both an individual and an employer mandate associated with the ACA. While there is no longer a tax penalty associated with going uninsured (the individual mandate), there is very much still an opportunity for people to pur chase subsidized health insurance coverage through the ACA’s exchanges. And with the pending fix of the so called “family glitch,” millions of people will become eligible for subsidized coverage.

Speaking of the ACA’s employer mandate, employers will need to rethink and possibly restructure premium cost-sharing strategies associated with their group health insurance plan offerings. Taking into account the affordability of health insurance for the entire fam ily (not just the employee, which is the current ACA test), along with the recent expansion of ACA tax credits/subsidies to more benefactors than the original ACA guidelines prescribed (courtesy of the Inflation Reduction Act which extends until 2025), these two changes affect an estimated 5.1 million people impacted by the family glitch—and the 13 million enrollees that

UNDER CURRENT ACA GUIDELINES, EMPLOYERS SUBJECT TO THE EMPLOYER MANDATE FACE A VERITABLE “PAY OR PLAY” DECISION.

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