Affordable Care Act Family Glitch
Joel Gonzalez • May 19, 2023
The Family Glitch fixes affordability loophole
Title: The Affordable Care Act's Family Glitch: Understanding its Impact
Introduction:
In 2010, the Affordable Care Act (ACA), also known as Obamacare, was signed into law in the United States with the aim of providing affordable healthcare coverage to all Americans. While the ACA brought significant changes to the healthcare system, it also introduced certain complexities, one of which is the "family glitch." This blog post aims to shed light on the ACA's family glitch, explaining what it is, its implications, and its potential impact on families across the nation.
Understanding the Family Glitch:
The family glitch refers to a loophole in the ACA's provisions related to affordability and eligibility for subsidized health insurance coverage. According to the ACA, if an employee is offered affordable health insurance coverage through their employer, they are not eligible for subsidized coverage through the ACA marketplace. However, the law does not extend the same affordability calculation to include the cost of covering family members under an employer-sponsored plan.
Implications of the Family Glitch:
The family glitch has significant implications for families who are affected by it. Essentially, it means that even if an employer offers affordable coverage to the employee, the cost of covering the employee's family members may not be taken into account when determining their eligibility for subsidized coverage through the marketplace. As a result, many families find themselves in a situation where the employer's plan is unaffordable when considering the cost of family coverage, but they are not eligible for subsidized coverage through the marketplace.
Impact on Families:
The family glitch can have a severe impact on families who fall into this coverage gap. Since they do not qualify for subsidized coverage through the marketplace, they may face difficulties in obtaining affordable health insurance for their entire family. In some cases, families may be left with no other option but to enroll only the employee in the employer-sponsored plan, leaving the rest of the family uninsured or forced to seek coverage through other means, such as private plans that could be costly.
Efforts to Address the Family Glitch:
Recognizing the issue, several lawmakers and advocacy groups have made efforts to address the family glitch. Various proposals have been put forward to close this loophole, either by amending the ACA or through standalone legislation. The proposed fixes typically involve extending the affordability calculation to include the cost of family coverage under an employer-sponsored plan.
Conclusion:
While the Affordable Care Act aimed to provide comprehensive and affordable health insurance coverage for all Americans, the family glitch has emerged as a notable flaw in its implementation. Families affected by the glitch face challenges in accessing affordable coverage for their entire household. As discussions and debates continue, it is crucial to find a solution that ensures fairness and affordability for families, closing the gap and allowing them to obtain the healthcare coverage they need and deserve.
Key Person Insurance: Key person insurance is a type of life insurance policy that covers the life of a key employee or executive within a company. These individuals are crucial to the success and stability of the business. If a key person were to pass away unexpectedly, the company could face financial hardships, such as the loss of revenue, increased expenses, or the need to recruit and train a replacement. Key person insurance helps mitigate these risks. In a key person insurance policy, the business is the policy owner, pays the premiums, and is the beneficiary. If the key person dies, the death benefit is paid to the business. This payout can be used to cover financial losses, recruit and train a replacement, or even repay debts. Key person insurance provides financial security and helps the business continue its operations during a challenging period. Buy-Sell Agreements: A buy-sell agreement is a legal contract between business owners that governs what happens if one of them dies or leaves the business. It ensures a smooth transition of ownership and addresses potential conflicts. Life insurance is often used in buy-sell agreements to fund the buyout of a deceased or departing owner's share of the business. Here's how it works: The owners enter into a buy-sell agreement that stipulates the terms and conditions of the buyout. In the event of an owner's death, the remaining owners use the life insurance proceeds to purchase the deceased owner's interest in the business from their estate. By having life insurance, the surviving owners can access the necessary funds to buy out the deceased owner's shares without depleting business assets or resorting to loans. The life insurance policy is typically structured as a cross-purchase or entity redemption agreement. In a cross-purchase agreement, each owner buys a life insurance policy on the lives of the other owners. In an entity redemption agreement, the business itself purchases the life insurance policies on the lives of the owners.
Life changes that can qualify you for a Special Enrollment Period Notice: Important: If you had a change more than 60 days ago but since January 1, 2020 If you qualified for a Special Enrollment Period but missed your deadline to enroll in coverage because you were impacted by the COVID-19 emergency, you may be eligible for a Special Enrollment Period. If you or anyone in your household lost qualifying health coverage in the past 60 days (or more than 60 days ago but since January 1, 2020) OR expects to lose coverage in the next 60 days, you may qualify for this Special Enrollment Period through the application. If you had a life event other than a loss of coverage more than 60 days ago and missed your Special Enrollment Period, contact the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) for more information. Changes in household You may qualify for a Special Enrollment Period if in the past 60 days you or anyone in your household: Got married. Pick a plan by the last day of the month and your coverage can start the first day of the next month. Had a baby, adopted a child, or placed a child for foster care. Your coverage can start the day of the event — even if you enroll in the plan up to 60 days afterward. Got divorced or legally separated and lost health insurance. Note: Divorce or legal separation without losing coverage doesn’t qualify you for a Special Enrollment Period. Died. You’ll qualify for a Special Enrollment Period if someone on your Marketplace plan dies which causes you to lose your current health plan. Changes in residence You may qualify you for a Special Enrollment Period if you move to: New home in a new ZIP code or county The U.S. from a foreign country or United States territory Or, move to or from: Place you attend school (if you're a student) Place you both live and work (if you're a seasonal worker) Shelter or other transitional housing Moving only for medical treatment or staying somewhere for vacation doesn’t qualify you for a Special Enrollment Period. You must prove you had qualifying health coverage for one or more days during the 60 days before your move. You don't need to provide proof if you’re moving from a foreign country or United States territory. Loss of health insurance You may qualify for a Special Enrollment Period if you or anyone in your household lost qualifying health coverage in the past 60 days (or more than 60 days ago but since January 1, 2020) OR expects to lose coverage in the next 60 days. Notice: If you lost coverage more than 60 days ago, but since January 1, 2020, and didn’t enroll sooner because you were impacted by the COVID-19 emergency declared by FEMA, you may still qualify for a Special Enrollment Period. Apply to see if you qualify. You may be asked to submit documents to confirm the loss of coverage. You may qualify for a Special Enrollment Period if you lost: Job-based coverage Individual health coverage Medicaid or the Children’s Health Insurance Program (CHIP) coverage (or were denied Medicaid/CHIP) Eligibility for Medicare Coverage through a family member An employer offer to help with the cost of coverage You may qualify for a Special Enrollment Period if you (or anyone in your household) were offered an individual coverage HRA or a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) in the past 60 days OR expects to in the next 60 days. Note: Your employer may refer to an individual coverage HRA by a different name, like the acronym “ICHRA.” If you qualify to enroll in Marketplace coverage through this Special Enrollment Period, contact the Marketplace Call Center to complete your enrollment. You can’t do this online. More qualifying changes Other situations that may qualify you for a Special Enrollment Period: Gaining membership in a federally recognized tribe or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder Becoming a U.S. citizen Leaving incarceration Starting or ending service as an AmeriCorps State and National, VISTA, or NCCC member Learn about Special Enrollment Periods for complex issues. Notice: You may have to verify your information. When you apply, you must attest that the information you provide on the application is true, including the facts that qualify you for a Special Enrollment Period. You may be required to submit documents that confirm your eligibility to enroll based on the life event you experience.