The state of the health insurance market is constantly changing and those that are business owners or group plan administrators have seen how difficult it can be to keep up and remain compliant. We are committed to helping everyone stay informed to take good care of their employees. Most recently, as of October 11th, there were new guidelines released from the Internal Revenue Service (IRS) regarding premium tax credits for individuals that may not be the right fit on an employer-provided group health plan.
This change is intended to fix the so-called â€œfamily glitchâ€ by extending marketplace subsidies to an employeeâ€™s household members that may not have been eligible before. In the past, eligibility was determined by whether or not the premium for single group medical coverage offered to an employee was affordable. Now, it is based on whether the premium for a FAMILY group medical coverage is affordable. For example, if the family plan offered by the employer to an employee is not affordable for them, their spouse and children may be eligible to receive a subsidy and the employee can remain on the group plan.
Subsidies are determined by the Marketplace, established by the Affordable Care Act, and are based on total household income. The plans, as far as coverage, remain the same but the premium may be discounted in tiers depending on their income level. This is reevaluated every year based on their projected income and tax filings.
So what does this mean for an employer? It doesnâ€™t change anything for the group plan administration but it does provide another option for employeesâ€™ family members to obtain health care coverage that they can afford. Because this new regulation is focused on the family members of employees, it does not change anything with mandates for large employers to offer coverage to employees or their family.
If you are an employer that offers health insurance benefits, we recommend sharing this information with your team. We are happy to help guide them through the individual health insurance market, should they choose to pursue it for their spouse and/or children. Here is a copy of this new regulation if youâ€™re interested in reading more.