Feds increase ACA tax credits through fix to the ‘family glitch’

The Treasury Department on Tuesday announced new rules that determine the tax breaks for certain families when they buy private health insurance plans through the Affordable Care Act (ACA) (Source: “New rules fix ‘flaw’ for families seeking Obamacare coverage,” Associated Press, Oct. 11).

The new interpretation of the health law aims to fix the “family glitch,” which determines a family’s eligibility for ACA tax credits based on the cost of an individual’s work-sponsored health insurance plan rather than the cost of the plan for the whole family.

Since the law was enacted more than a decade ago, people who have access to health insurance plans through their employers are supposed to get price breaks on the Affordable Care Act marketplace if they pay more than 9.5% of their income toward monthly premiums.

But for years, the Internal Revenue Service arrived at that calculation based on the cost of a work-sponsored health insurance plan for a single individual, instead of a more expensive family plan. That meant many families didn’t qualify for the tax breaks offered through the ACA.

“Given the complexity of the policy, we encourage families to work with a certified and licensed Navigator organization by calling 833-628-4467 or visiting getcoveredohio.org,” said Zach Reat, Director of Health Initiatives for the Ohio Association of Foodbanks.