SACRAMENTO — A new federal rule takes effect on Monday, opening the door for nearly 400,000 people to enroll in a more-affordable health plan through Covered California. The change means families who have been ineligible for financial help because one member is insured through an employer may now be eligible for subsidies to lower the cost of their premiums if they enroll in a health plan offered through Covered California.
“The door to more-affordable health coverage is opening today for hundreds of thousands of Californians,” said Jessica Altman, executive director of Covered California. “There are families across California who will now be able to save hundreds of dollars a month, and thousands of dollars a year, if they switch from employer-sponsored coverage to a Covered California plan.”
What You Need to Know
In October, the U.S. Treasury Department and the Internal Revenue Service released the final rule to address the so-called “family glitch.” Previously, if a family member had employee-only health coverage that was considered affordable, the employee and their family members were ineligible for federal financial help, even if the cost of family coverage exceeded the affordability threshold and was considered unaffordable.
Starting today, when families apply for 2023 coverage during the current open-enrollment period, their eligibility for financial help will be determined by whether the cost of coverage is considered affordable for the employee’s spouse and dependents.
400,000 Californians could get more-affordable coverage
The UCLA Center for Health Policy Research estimates that 615,000 Californians are caught in the “family glitch.” Of those, 391,000 people — who previously were not eligible for federal subsidies because a family member had an offer of employer-sponsored coverage — will now be eligible for financial help through Covered California.
According to the study, the 391,000 people who would benefit include:
- 319,000 people who would be able to save money by switching from their employer-sponsored coverage, or coverage through the individual market, to Covered California.
- 72,000 uninsured people who would be newly eligible for financial help through Covered California.
A study by the Kaiser Family Foundation found that the people caught in the “family glitch” are more likely to be women, children and lower income.
Covered California is an independent part of the state government whose job is to make the health insurance marketplace work for California’s consumers. It is overseen by a five-member board appointed by the governor and the Legislature. For more information about Covered California, please visit www.CoveredCA.com.
