Alden Bianchi and Teal Trujillo authored an article entitled ‘Fixing the ACA’s Family Glitch’, published by Bloomberg Law. The “family glitch” was a regulatory oddity of the ACA which required the affordability of an employer-sponsored health plan to be determined based solely on the cost of the plan to an individual employee, disregarding the costs to add family members to a plan. This resulted in many families being ineligible for marketplace premium subsidies when purchasing their own health insurance on exchanges. In October 2022, the Treasury Department and Internal Revenue Service issued a final rule designed to fix the “family glitch.” Commencing in 2023, affordability of employer coverage for family members is determined based on the total cost of covering the employee and the related individuals.
While it is not unusual for an administrative agency to modify or change a regulatory position over time, usually in response to changing circumstances, an outright reversal is less common. This article examines the rationale advanced by the Internal Revenue Service in support of its changed position in the matter of the “family glitch.” It also considers how the new position of the Internal Revenue Service might fare if challenged in the wake of West Virginia v. EPA.