March 29, 2019
In a bid to strengthen the Affordable Care Act (ACA), House Democrats introduced a new bill that would eliminate what is known as the “family glitch” for ACA exchange plans, a move which could require employers to collect family income data from employees in order to avoid significant ACA penalties.
The “family glitch” is the ACA rule that bases eligibility for a family’s premium subsidies on whether available employer-sponsored health benefits for individual coverage is affordable for the employee (9.86 percent of their W-2 pay), even if the employer's offer of family coverage is not actually affordable. It is estimated that between two and four million employees are affected by the family glitch.
The ACA fix bill would eliminate this glitch, but employers would likely have to collect family income data from employees to ensure their family coverage is affordable and thus avoid significant ACA penalties.
The bill would also:
Notably, the reinsurance program would not be funded by self-insured employers, but would be paid out of general Treasury funds.
Outlook: The bill is expected to be brought to a vote in the House but has no chance of passing the Republican-controlled Senate. However, some elements of the bill have bipartisan support and could make it into law.