The Biden Administration on April 5 proposed a rule to strengthen the Affordable Care Act (ACA) by fixing the “family glitch,” something the CAP and other medical groups had been urging for months. The glitch affects about 5 million people and has made purchasing an affordable, high-quality marketplace health insurance plan difficult for certain families.

With the family glitch, families of workers facing unaffordable premiums for coverage offered through their employers remain ineligible for premium and cost-sharing subsidies to purchase ACA marketplace coverage. As a result, families affected by the glitch are left to either pay a significant percentage of their income for family coverage or go uninsured.

Under the rule proposed by the Treasury Department and the Internal Revenue Service, family members of workers who are offered affordable self-only coverage but unaffordable family coverage may qualify for premium tax credits to buy ACA coverage. Should the proposed change be made, it’s estimated that 200,000 uninsured people would gain coverage, and nearly 1 million Americans would see their coverage become more affordable.

The CAP has urged Congress to fix the glitch as part of strengthening and expanding access to health care coverage. Similarly, the American Medical Association (AMA) had called for this change in a September 29, 2021, letter to Chiquita Brooks-LaSure, administrator of the Centers for Medicare & Medicaid Services (CMS). In the letter, the AMA noted that the family glitch has significant consequences for the coverage options, health, and finances of impacted families of workers, especially those with lower incomes. The average employee contribution for self-only coverage was estimated to be $1,243 in 2020, while the average contribution for family coverage was estimated to be $5,588.

The proposed rule is slated to take effect January 1, 2023, in time for the next open enrollment period. According to the White House, the proposed rule would amount to the most significant administrative action to improve implementation of the ACA since its enactment.