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Kuster introduces bill to expand tax credit, addressing ‘family glitch’ in Affordable Care Act

Last modified: 6/14/2014 12:32:31 AM
In an attempt to address what’s referred to as the “family glitch” in the Affordable Care Act, U.S. Rep. Annie Kuster introduced the Family Coverage Act this week to expand access to premium tax credits for those whose employer-provided health insurance exceeds a certain amount of their annual household income.

The bill, proposed Thursday, seeks to amend the Internal Revenue Service guidelines so that employees are eligible for tax credits if their insurance contributions for employer-provided health insurance would exceed 9.5 percent for family coverage. Under current IRS regulations, that 9.5 percent threshold for determining affordability is only being applied to individual coverage, say Kuster and representatives for organizations addressing health care access in New Hampshire.

As Lisa Kaplan Howe, Policy Director for NH Voices for Health, explained: “The affordability test to determine if you should be able to purchase employer-sponsored coverage for the entire family is based on the cost of coverage for only one person.” Those whose employer-sponsored plans meet that affordability standard are not presently eligible for premium tax credits. Kuster’s bill, if passed, would change that to apply to “taxable years beginning after December 31, 2013.”

“What was happening was that there were middle-class families that could not qualify for the tax credit even though the cost of family coverage was very high,” said Kuster, a Democrat. “So our goal was to ensure that, if they don’t have access to affordable job-based coverage, they can receive a premium tax credit to help pay for family coverage.”

If families go without insurance because they’re unable to afford it, Kuster said, the expenses can add up for everyone in the system, as people might end up requiring costly emergency services for medical conditions that go unaddressed.

New Hampshire residents have contacted Kuster’s office alerting her of their difficulty affording coverage due to the discrepancy with what was being counted toward the 9.5 percent affordability threshold for plans from employers. Kuster did not have an estimate of how many New Hampshire residents may be affected, but she said her office is working with other organizations to gather such data.

The New Hampshire Hospital Association, Bi-State Primary Care Association and NH Voices for Health – which are among supporters of the legislation – also did not have statistics regarding the number of families who are unable to qualify for the tax credits under current regulations.

Though it’s tough to quantify the extent of the problem in the state, Bi-State Executive Director Tess Kuenning said it’s nonetheless a “significant barrier” some people have encountered when weighing their options for insurance. She said she’s optimistic the proposal put forth by Kuster’s bill will help families across New Hampshire who would otherwise be left without affordable coverage.

“If what it does is change the affordability not based on an individual contribution amount but to the family, then we would be able to allow more families – and couples as well – to get insured,” Kuenning said.

Despite political resistance the Affordable Care Act has faced since its implementation, Kuster said she’s undeterred by the possibility of opposition to her measure.

“We’ve got to move the conversation forward and fix these types of provisions that need fixing, stay focused on the goal of providing access to quality affordable health care,” she said, adding that she hopes to gather bipartisan support moving forward.

Co-sponsors of Kuster’s bill include New Hampshire U.S. Rep. Carol Shea-Porter and Reps. Chellie Pingree of Maine, Allyson Schwartz of Pennsylvania and Earl Blumenauer of Oregon, all Democrats. A companion bill was introduced in the U.S. Senate earlier this week by Democratic Sen. Al Franken of Minnesota.

(Casey McDermott can be reached at 369-3306 or cmcdermott@cmonitor.com or on Twitter@caseymcdermott.)


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