Open Enrollment – They Fixed The Family Glitch!
Since its inception in 2012, major medical coverages via the Affordable Care Act (ACA) have not been available for the dependents of employees where the employee was offered major medical insurance. In most instances the employer pays a portion or all of the health insurance premiums for employees while the employee has to bear the burden of the entire monthly premium for spouse and dependent children. Due to the high cost of premiums many times the employee’s family would go uncovered.
Starting with open enrollment November 1, 2022, if a consumer has an offer from their employer of coverage that extends to family members, the affordability of the employer coverage for family members will be based on the family premium and not the employee only premium. If the family premium exceeds 9.12% of the employee’s household income then the family members are now eligible for ACA coverage through the exchange. This will allow for many many more consumers to qualify and to receive tax credits and coverage through the ACA exchange! In the past the premium required to cover any dependent family members was not taken into account by the ACA system.
Here is a quick example:
Paul and Lisa are married with two children under the age of 26 and will file a joint tax return in 2023. Paul is offered coverage through his employer at ABC Inc., and that coverage extends to
Lisa and the kids. Lisa is not offered coverage through her employer. Paul and Lisa have a household income of $50,000.
The low cost plan offered by ABC Inc. that would cover Paul only is $200 per month.
The lowest cost plan offered by ABC Inc. that would cover Paul, Lisa and the children is $1,200 per month.
For 2023 coverage for Paul remains ineligible for ACA coverage. However the much larger family premium of $1,200 per month exceeds the 9.12% of their household income, which
allows Lisa and the children to seek coverage (with tax credits to assist with premiums) through the ACA exchange for January 1, 2023 effective dates.
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