News & Updates
The IRS recently issued final regulations that revise how employer-sponsored affordability is calculated for a family regarding their eligibility for the premium tax credit for Marketplace coverage.
Previously, an employee’s family coverage was deemed to be affordable based solely on the employee-only coverage being affordable, regardless of the cost of the entire family’s coverage. This situation has been referred to as the “family glitch” and meant that the employee’s family members would not be eligible for any Affordable Care Act subsidies.
These final regulations aim to fix the “family glitch” by changing the definition of affordability to now reference the cost to cover the entire family when determining premium tax credit eligibility for the employee and their family members. The regulations go into effect December 12, 2022.
Important note: CCSB allows employers to offer employee-only coverage. With this new ruling, groups that previously selected the employee-only coverage may want to now offer dependent coverage as it would give employees with dependents more flexibility, whether they qualify for ACA subsidies or not. Please contact your B&P Sales Team if you have any groups in this situation.
The information contained herein is for informational purposes only and is not intended as legal or tax advice.