Proposed Change to Family Coverage Affordability Rules
On April 5, 2022, the IRS released a proposed rule that would change the existing rules for eligibility for the premium tax credit (PTC). The PTC is available to eligible individuals who purchase health insurance coverage through the Exchange. Individuals who have access to affordable, minimum value employer-sponsored coverage are not eligible for the PTC.
Currently, whether employer-sponsored coverage is considered affordable for family members is determined based on the lowest-cost self-only coverage available to the employee. The cost of family coverage is not currently taken into account. The proposed rule would provide that an employer-sponsored plan is affordable for family members if the portion of the annual premium the employee must pay for family coverage (the employee’s required contribution) does not exceed 9.5% (as adjusted annually) of household income.
The proposed rule does not address how or whether this change will impact the affordability calculation for the employer shared responsibility rules.
Filed Under: Benefits Briefs