April showers brought more than just May flowers, it brings a fix to the long frustrating Affordable Care Act (ACA) rule known as the “family glitch.” The Department of the Treasury recently released the Notice of Proposed Rulemaking correcting the “family glitch” by extending eligibility for the ACA’s premium tax credit (a.k.a., subsidy or Exchange subsidy) to families of employees offered affordable, ACA-compliant employer-sponsored coverage. If the employee premium contribution would be unaffordable to the family (as determined by regulations and currently set at 9.61%, the family could separately qualify for a premium subsidy for Exchange coverage. Previously, if the employee-only portion of the employer-sponsored coverage was deemed affordable, as defined by regulations and set at 9.61% of the Federal Poverty Level, the Employee’s W-2 or rate of pay for 2022, the family was not be eligible for a premium tax credit for coverage obtained in the Exchange. This is often called the “family glitch.” Comments on the proposed rule are due by June 6, and a public hearing will be held on June 27. If finalized, the provision would take effect on January 1, 2023.
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