We Are Family – IRS Regulations Fix the “Family Glitch” in Connection with ACA Coverage
One of the key remaining features of the Affordable Care Act (ACA) is that certain employers must offer their employees medical coverage, or else pay a penalty. The details of that “employer shared responsibility payment” (ESRP) are many. One of those details is that the employer coverage must be “affordable.” Affordability looks at how much of an employee’s household income goes toward premiums.
As originally implemented, affordability was measured by reference to the premiums charged for employee-only coverage. The premium cost for family or other tiers of coverage wasn’t taken into account. Some critics called this the “family glitch.” Starting in 2023, that changes. New IRS regulations require that in 2023, affordability is measured by looking at the employee’s premium cost for family coverage. Read more