The new rule on affordability of employer coverage for the family members of employees
changes how affordability is calculated for employees’ family members and increases the number of consumers who have access to financial assistance through the Marketplace. The New rule applies as of January 1, 2023.
The new rule on affordability of employer coverage for the family members of employeeschanges how affordability is calculated for employees’ family members and increases the number of consumers who have access to financial assistance through the Marketplace. The New rule applies as of January 1, 2023.
Consumers who enroll in a Qualified Health Plan (QHP) through the Marketplace may be eligible for savings through PTC and/or cost sharing reductions (CSRs). Under the Patient Protection and Affordable Care Act (ACA), a consumer who has an offer of employer-sponsored coverage does not qualify for any of these financial assistance options unless the offer of coverage is considered unaffordable or fails to meet a “minimum value” standard. For 2023, a plan is considered “unaffordable” if the plan’s premiums exceed 9.12 percent of the employee’s household income. This percentage is referred to as the Required Contribution Percentage (RCP).
What Is Changing
The new rule on affordability of employer coverage for the family members of employees changes how affordability is calculated for employees’ family members and increases the number of consumers who have access to financial assistance through the Marketplace. The New rule applies as of January 1, 2023.
Until now, employer coverage has been considered affordable for all family members to whom an employer’s offer extends if the premium for the employee’s self-only coverage was affordable. The premium required
to cover any family members was not taken into account. As a result, all members of the employee’s family would be ineligible for financial assistance through the Marketplace if the premium for the employee’s self- only coverage was considered affordable.
Under the new affordability rule, if a consumer has an offer of employer coverage that extends to their family members, the affordability of employer coverage for those family members will be based on the family premium amount, not the self-only employee premium cost. As a result, members of the employee’s family will be eligible for financial assistance through the Marketplace if the premium for the employee’s family coverage is considered unaffordable.