Laura Hooper
In October, the IRS fixed a “glitch” in the administration of Affordable Care Act (ACA) premium assistance that had been disqualifying millions of people from tax credits to help them afford health insurance. The policy change, which overturned a 2013 interpretation of the ACA’s subsidy rules, came just in time for the 2023 ACA Marketplace open enrollment period, which runs from November 1 to January 15 in most states. AOTA supported the change in a June comment letter (https://bit.ly/3s6kvOR).
People who can access health insurance through an employer do not qualify for ACA subsidies unless the employer-sponsored coverage would cost more than a specified percentage of their household income (9.12% in 2023). The IRS’s old regulations applied this affordability test to the cost of covering one person, not a family. That meant that if a family member could get an affordable plan for themselves through work, the rest of the family was ineligible for subsidized ACA coverage—even if the cost of adding them to the employer plan would make it unaffordable. This policy became known as the “family glitch.”
The new regulations establish separate affordability tests for employees and family members, with the family test based on the cost of family coverage, making many spouses and children newly eligible for premium tax credits.
The premium tax credits will be larger than those available during the early years of the ACA. In 2021, Congress temporarily boosted ACA premium assistance in two ways: (1) it made the existing subsidy structure more generous, and (2) it removed the “subsidy cliff” that cut off eligibility at 400% of the federal poverty level. This past summer, they extended the enhanced subsidies through 2025.
For the first time, most Marketplace enrollees will also have the option to enroll in a “standardized plan”—a type of Marketplace plan with identical cost-sharing levels across different insurers for a set of key services, including OT. AOTA advocated for several cost-sharing features that CMS incorporated into the standardized plan design, including:
- occupational therapy cost-sharing parity with a primary care visit,
- exempting OT from the deductible, which means that insurance pays for OT visits right away (when the deductible applies to a service, the consumer is responsible for 100% until the deductible amount is met and insurance begins to pay), and
- a copay (fixed dollar amount), not coinsurance (a percentage of the cost of the service), for OT services.
Marketplace plans are comprehensive health insurance products that guarantee coverage of the essential health benefits (EHBs), including rehabilitative and habilitative services and devices. We believe that incorporating these cost-sharing principles will make it more likely that people with Marketplace coverage will use the OT benefits their plans cover.
Laura Hooper is AOTA’s Manager of Health Policy.
