For years, the family glitch has caused problems for many employees and their families in Tennessee and the rest of the US, but on April 5, 2022, the Biden Administration proposed a rule to help fix this problem. The family glitch happens when an employee is offered health insurance by their employer which causes the employee’s family to lose their eligibility for a subsidy if they went to the marketplace for insurance. This means the employee’s family would have to pay full price if they went to the marketplace or full price if they got their insurance through the employee’s job (because many employers are not required to help pay for dependent’s insurance). Without the help of a subsidy, insurance plans can cost thousands of dollars for employee’s dependents. This can be a real burden for some families, and it has needed a solution for years.
The Proposed fix is simple and would help solve this problem. The original problem happened because calculating the affordability of health insurance costs only considered the employee and did not consider the employee’s family. The new rule would require that the employee’s family be considered when calculating affordability, which would allow many of them to receive a subsidy when buying health insurance from the marketplace. This will not completely fix the problems in the health insurance world, but it is a step in the right direction. The IRS will have a public hearing on June 27, 2022, that the public can submit comments for.
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