Payers are largely in support of the Biden administration's proposal to fix the "family glitch" within the Affordable Care Act but are urging additional guidance to support implementation, according to a June 3 AHIP letter to the Internal Revenue Service.
Individuals without access to affordable health coverage through their employers can qualify for premium tax credits to purchase coverage through the ACA marketplace. The federal definition of affordable employer-provided coverage is only for single individuals and not for family members, meaning about 5 million people are ineligible for the marketplace subsidy.
The proposed fix, first announced April 5, directs the Treasury Department and IRS to allow family members of employees who are offered affordable self-only coverage but unaffordable family coverage to qualify for the tax credits.
AHIP, the Blue Cross Blue Shield Association, the American Medical Association and the American Hospital Association all previously announced support for the proposal.
"We are pleased to see the rule does not propose changes to the affordability test for employees and thus preserves the employer firewall," the AHIP letter said.
Though supportive, the insurance group said it needs additional guidance to support the execution of the new rule.
"After finalizing the rule, Treasury and IRS should issue a Request for Information to better understand the recordkeeping and compliance needs of stakeholders who will be affected by the final rule," AHIP said. "It will be critical that Treasury and IRS issue guidance that clearly details how plan sponsors and administrators, as well as individual taxpayers, are to satisfy requirements that ensure proper eligibility calculations for premium tax credits.
Additionally, the group is asking the government to develop more resources around how to communicate the new rule to families and how to enroll.
The letter also asks the government to address minimum value calculations for family plans.
"It is our experience that most plans offered by employers do not feature different benefit designs for employees and for related family members," AHIP said. "Therefore, we recommend the minimum value calculator continue to be based on a standard population that includes both employees and dependents to calculate a single, composite minimum value for employee and dependents unless the plan's benefit design for employees is different from its design for related individuals. Separate standard populations should not be required."