New Obama-era health care law aims to address ‘family glitch’

Families who receive expensive health insurance through employers may see a price reduction if they sign up for coverage through the Affordable Care Act marketplace this fall instead.

The Treasury Department has announced new rules defining tax breaks for certain families when they purchase private health insurance plans under the Affordable Care Act.

The new interpretation of the Obama-era health care law seeks to correct the “family glitch” that determines a family’s eligibility for ACA tax credits based on the cost of a work-sponsored individual health plan, rather than the cost of the plan as a whole. a family.

Since the law was passed over a decade ago, people who access health insurance plans through their employers must receive discounts in the Affordable Care Act market if they pay more than 9.5% of their income in monthly premiums.

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But for years, the Internal Revenue Service came up with this calculation based on the cost of a work-sponsored health plan for a single person, rather than the more expensive family plan. This meant that many families were not eligible for the tax credits offered by the Affordable Care Act.

“Today’s action addresses a flaw in previous ACA rules to provide more affordable coverage for approximately one million Americans,” Health and Human Services Secretary Xavier Becerra said in a statement. “Our goal is simple: leave no one behind and give everyone the peace of mind that comes with health insurance.”

The number of uninsured Americans has dropped to an all-time low of 8% this year, with about 26 million people in the US still uninsured.

Open enrollment for the Affordable Care Act begins November 1st.

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