Biden Bid to Expand Health Subsidies: 'Family Glitch' Explained

This week I want to highlight the Family Glitch Act proposed by the Biden administration. If you haven't heard of this act, it is in response to a section of the ACA that decreases the ability for families to qualify for health subsidies that make healthcare more affordable.

Currently, families do not qualify for health subsidies if they pay 9.61% or less of their paycheck on health insurance.

The current administration's expanded health subsidies proposal aims to allow family members who pay more than 10% of their income toward health coverage to qualify for a subsidy.

Through this proposal, nearly 1 million Americans will have access to more affordable healthcare, and nearly 200,000 will gain coverage.

I think this is a good thing for low-income employees and people that have families. It will make health insurance more affordable to about 5 million more Americans than there are currently today.

Now, it's great for these families to afford coverage, but let's talk about how that will affect the employers, especially those considered Applicable Large Employers (ALEs) who are not offering at least minimum essential coverage to 95% of their staff. The Family Glitch Act will draw more people over to the exchange, and they will receive subsidies. This will trigger Penalty B more than ever for their employers. Penalty B is triggered when a person is not offered affordable coverage from their employer, and they go on to the exchange and get a subsidy.

As a trusted adviser and employee benefits broker, you need to get ahead with industries that have companies that fall into this category.

If you'd like to know more about the Family Glitch Act, call me, reach out to me on LinkedIn, or email me.