Close followers of administrative activity may have noticed that the Treasury Department is aiming to issue a notice of proposed rulemaking (NPRM) on the eligibility rules for advanced premium tax credits (APTCs) in the Marketplace. Though no deadline is specified – and the regulatory agenda is often overly ambitious – this could mean that the Administration is planning to fix the family glitch.
Under current Marketplace rules, subsidized plans are generally only available to people who cannot get coverage through a public program, such as Medicare or Medicaid, or their employer. There are exceptions if the other coverage does not meet the minimum essential coverage requirements or is not considered affordable. However, the current regulatory definition of affordable only refers to the cost of insuring the employee, not their dependents. The cost of dependent coverage is nearly three times more on average than the cost of self-only coverage. Yet, even if the cost of coverage for the employee’s family would far exceed the affordability threshold, the employee’s family is not eligible for Marketplace subsidies under current program rules.
The brief description in the regulatory agenda points to President Biden’s Executive Order 14009 (EO), which calls for the Secretaries of Labor, Treasury, and Health and Human Services to review all agency actions to ensure they are consistent with the Administration’s policy to “protect and strengthen Medicaid and the ACA and to make high-quality healthcare accessible and affordable for every American.” Specifically, the EO calls for a reexamination of “policies or practices that may reduce the affordability of coverage or financial assistance for coverage, including for dependents.”
The Kaiser Family Foundation estimates that more than 5.1 million people fall into the family glitch, more than half of whom are children (2.8 million under age 18). About 85% of those in the family glitch are insured through employer-sponsored insurance (ESI), but could save money if they could enroll in subsidized Marketplace plans instead. Women are more likely than men to be in the family glitch (59% vs. 41% of adults, respectively), and the states with the largest number of people falling into the family glitch are Texas, California, Florida, and Georgia.
With so many families struggling to make ends meet, it would really help if the Marketplace affordability rules accurately accounted for the costs of family coverage when determining eligibility for APTCs in the Marketplace. Saving money on health insurance premiums would allow families to stretch their budgets for other priorities such as keeping up with the rising costs of housing, transportation, and food. We’ll be on the lookout for Treasury to post an NPRM and alert SayAhhh! readers to related opportunities for public comment.