"Family Glitch"

While many people are able to access health coverage now that the Affordable Care Act has been implemented, there are still large groups of people that fall through the cracks. Working families sometimes find themselves in one of these gaps-- a very big one.

I worked with a family earlier this year to renew their Marketplace coverage from last year. Both parents work for a local grocery store, and had been "part-time employees" who were actually working nearly full-time hours. Shortly before they came to meet with me, the husband was officially promoted to be a full-time worker, which came with all the full-time benefits. Though their income essentially remained the same, this seemingly small change greatly affected the ability to sustain their current health coverage.

The ACA states that in order for someone to be eligible for tax subsidies on the Marketplace, they must not be eligible for other affordable insurance that meets "minimum essential coverage," in other words, covers all the required health care elements. If someone is eligible to purchase affordable insurance through their job, they are not eligible for subsidies.

But what defines affordability? Employer coverage is considered affordable if the lowest costing plan for the individual costs less than 9.5% of total household income.

At first glance, this seems fair enough. But reading again, a bit closer, "the lowest costing plan for the individual..." Wait, does this mean that if the lowest costing plan for the individual, (that is, the employee), is affordable, but it costs exponentially more to add a spouse or children, that it is still considered "affordable" for them?!?

Let's say, for instance, that for a family of three the family income is $3,000/month. The insurance premium for the individual is $150/month, or 5% of their income, and that is considered affordable. But to buy insurance for the whole family from the employer, the premium cost would be $600/month, or 20% of the family income. Unaffordable!

The short of it is: Yes. Family members of someone offered affordable insurance through their job are caught in the midst of the Family Glitch. The employee being offered the affordable insurance must take the individual coverage (or face the tax penalty). As for the rest of the family? They are ineligible for subsidies on the Marketplace, but purchasing insurance through their family member's employer is often not financially feasible.

This was exactly the case for this family I worked with--they were no longer eligible for the tax subsidies they had been receiving on the Marketplace. The husband was able to enroll in his employer-offered coverage for a reasonable rate, but to add on the wife, it would have cost significantly more than 9.5% of their income.

In many places in the country, people in this situation would be faced with the choice of paying steep rates for health coverage, or just going without. Thankfully, here at the Washtenaw Health Plan, our doors are open for county residents with chronic health conditions that fall in the Family Glitch. I was able to enroll the wife into our program, and ensure that she was able to access prescriptions and visit the doctor to monitor her health concerns.

In other cases, some members of the family may be eligible for Medicaid or MIChild, or be able to apply for charity care programs at local health systems. The rest of the family could also be eligible to get an income-related tax exemption, and not have to pay the penalty

Family members can avoid tax penalties by filing for an exemption, however this still does not allow them to access medical care. Charity care programs, Federally Qualified Health Centers, and free clinics can help. 

While Congress has acknowledged the oversight, there is a standstill as to what will be done to fix the problem.

--Haley Haddad


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