“Family Glitch” Fix Improves Access to Care

October 17, 2022

The Internal Revenue Service (IRS) recently finalized policy changes that make health care coverage more affordable for approximately one million individuals by fixing the so-called “family glitch.” The new policy updates the interpretation of the “affordability” of health insurance plans and allows eligible families to receive tax credits to buy more affordable insurance through an Affordable Care Act (ACA) exchange if employer coverage is too costly.  

Under the ACA, employer coverage is deemed unaffordable if an employee’s share of the premium exceeds 9.83% of their household income. If the employee’s share of the premium exceeds this threshold, the individual qualifies for advance premium tax credits to purchase more affordable coverage through an ACA Marketplace.  

However, following a 2013 U.S. Department of the Treasury interpretation of the ACA, even if coverage for an employee’s family costs more than 9.83% of their household income, the employee’s family was deemed ineligible for advance premium tax credits if “self-only” coverage for the employee did not exceed 9.83%. The issue has been referred to as the “family glitch,” and as a result of this issue, low- and moderate-income families have had to pay more out-of-pocket for employer plans or forgo coverage all together.  

In a comment letter, which was sent to IRS after the now final policy change was first proposed, ASCO supported the IRS’ plan to update the interpretation of “affordability.” ASCO is committed to helping to ensure that all people affected by cancer receive high-quality, equitable care, and the Association applauds IRS for improving access to care for many more Americans. 

Stay tuned to ASCO in Action for news advocacy and analysis on cancer policy.