President Joe Biden has proposed a rule that would strengthen the Affordable Care Act (ACA) by allowing family members of workers who are offered affordable self-only coverage to qualify for premium tax credits to buy ACA coverage. Under the current version of the ACA, according to the White House fact sheet, people who do not have access to affordable health insurance through their jobs may qualify for a premium tax credit to purchase affordable, high-quality coverage on the ACA’s health insurance marketplaces. But regulations define employer-based health insurance as affordable if the coverage solely for the employee, and not for family members, is affordable. Thus, some family members may be ineligible for a premium tax credit even if they need it to afford high-quality coverage through the ACA marketplace. ThIs “family glitch” affects about 5 million people and has made it impossible for many families to use the premium tax credit to buy an affordable, high-quality marketplace plan.  

Specifically, under the current system, costs for single people on coverage plans are capped at 10 percent of their incomes, but that cap doesn’t apply to spouses and children who are offered insurance through family members’ jobs, according to NBC News. Thus, some  family members pay as much as 25 percent or 30 percent of their incomes on health insurance. 

President Biden proposes to change the definition of affordable through rule-making at the Treasury Department and the IRS. In its fact sheet, the White House stated, “Should today’s proposed rule be finalized, family members of workers who are offered affordable self-only coverage but unaffordable family coverage may qualify for premium tax credits to buy ACA coverage. Should the proposed change be made, it’s estimated that 200,000 uninsured people would gain coverage, and nearly 1 million Americans would see their coverage become more affordable. Many families would be able to save hundreds of dollars a month thanks to lower premiums. This proposed rule would amount to the most significant administrative action to improve implementation of the ACA since its enactment.”

According to NBC News, since Biden took office, enrollment and coverage through the ACA, is at its highest level. His administration has worked to increase participation in the ACA by opening a special enrollment period for people to get coverage during the coronavirus pandemic and by stepping up outreach and marketing efforts. Over the winter, 14.5 million people bought ACA marketplace plans, including 6 million newly insured people.. 

In announcing the change, Biden will be joined by former President Barack Obama at the White House for the first time since Obama left office.