Urge the IRS to fix the “family glitch” before June 6

Written by: Hunter Nelson
Date Posted: May 27, 2022

On April 5, the Biden administration announced a proposed rule through the Internal Revenue Service (IRS) to fix the Affordable Care Act (ACA) of 2010’s “family glitch.” Under this “glitch,” “affordability” of employer–based health care coverage is defined solely by the cost of individual-only coverage – without considering the cost of a family plan. This can be nearly three times the cost of individual-only coverage. 

However, because these family members have an offer of coverage – even if it may cost more than 10% of a family’s income – these family members are ineligible for the premium tax credits needed to allow them to access health coverage through the Marketplace. This glitch has long locked millions of women and children out of access to affordable health care coverage through the Marketplace. It also leaves many families – most of whom are  households with low or middle incomes – either uninsured or paying burdensome, expensive out-of-pocket costs for premiums.  

The newly proposed rule, “Affordability of Employer Coverage for Family Members of Employees,” would change the meaning of “affordability” to be based on the cost of family coverage rather than employee-only coverage. Under this rule, if an employee’s family-based coverage plan costs more than 9.6% of their family income, family members would receive federal subsidies to buy ACA coverage.  

If the new rule to fix the glitch is finalized, 64,000 children and other family members in Colorado would become eligible for premium tax credits that will improve their access to affordable coverage through the Marketplace. It is especially important to give families access to affordable coverage in this way, considering the upcoming public health emergency (PHE) unwind. The unwinding of PHE coverage will soon leave more than 197,000 Colorado children at a high risk of losing their health care coverage through Medicaid and/or Child Health Plan Plus (CHP+).  

The Colorado Children’s Campaign supports this proposed rule to fix the family glitch, which helps to ensure that every child has access to quality and affordable health care coverage. The Federal Register – an important advocacy tool – is currently accepting comments from the public on the proposed rule.  

To learn more, read the Biden administration’s statement about their proposed fix. 

Take action now 

The deadline to submit your own comments in support of the rule to the IRS is June 6. Feel free to review the Children’s Campaign’s comments in support of this rule change to help you draft your own. Community Catalyst has also provided a template for comments. Your organization can also sign onto pre-written group comments from Community Catalyst before 10 a.m. on June 3. They are specifically looking for the support of groups outside of the traditional “health care only,” as this is certainly an issue that impacts family economic security more broadly.

Hunter Nelson

About Hunter Nelson

Hunter works as a Policy Analyst at the Colorado Children’s Campaign. In this role, she supports the Children Campaign’s Vice President of Health Initiatives and other policy staff by assisting in the management of coalitions, maintaining relationships with key stakeholders, conducting relevant data collection and analysis, and coordinating policy advocacy strategies with other Children’s Campaign staff. Before coming to the Children’s Campaign, Hunter served as the Volunteer and Data Specialist for Child Advocates – Denver CASA, interned with the Bell Policy Center, and worked as a research assistant at the University of Denver’s Graduate School of Social Work. She has also worked with multiple organizations serving individuals and families experiencing homelessness across Metro Denver. She holds a Bachelor of Science in Anthropology from Arizona State University and a Master of Social Work degree from the University of Denver.