In previous years, the affordability of employer-sponsored health coverage has been based solely on the cost of the employee-only rate. Rates for dependent coverage is generally much higher than the employee-only rate. Families could not turn to the Marketplace for help because the employee-only rate offered on their eligible coverage was deemed affordable. Families have either had to do without health insurance or pay rates that are more than they could afford, creating what is known as the “Family Glitch”.
The Kaiser Family Foundation estimates that 5.1 million people fall into the “Family Glitch”. Additionally, they found that 85% of these are likely spending more of their household income on health insurance than other families with the same income who qualify for subsidies through the Marketplace.
That’s not the case today. The IRS issued a new regulation which states the affordability of family coverage on an employer sponsored group plan will be based on the family premium amount, not the employee only rate as before. Under this new rule, the employee can be covered under their employer’s group plan and their spouse and/or children can apply for assistance through the Marketplace.
There are some advantages and disadvantages to these scenarios.
Advantages may be:
- Available coverage for all family members
- Possible premium assistance (Premium Tax Credits or Cost Sharing)
- More affordable
Possible Disadvantages:
- Multiple plans in one family
- Family members may have to use different providers/networks
- Family members may have different deductibles
Insure It Forward is here to help you wade through the insurance possibilities and find the right plan for you and your family. Call or click HERE to schedule an appointment today!