Under current Obamacare tax rules, many middle-class families are prohibited from receiving tax credits, even when the cost of family coverage is simply unaffordable.
According to the IRS, health insurance for families is considered "affordable" if the employee's share of premiums for individual coverage--rather than the more expensive family coverage--is under 9.5 percent of family income. The result is that many middle-class families miss out on tax credits that would make their entire family coverage affordable.
For these lower-to-middle class families, obtaining affordable health insurance is practically impossible.
This problem is known as "The Family Affordability Glitch."
To fix this problem, Senator Al Franken introduced the Family Coverage Act (S. 2434) on June 5, 2014. This bill would "ensure that working families have access to affordable health insurance coverage."
Sen. Franken states:
Right now, many children and families in Minnesota and around the country could lose out on coverage because of the way that the Obama administration is misinterpreting the law. My legislation, which is supported by the Small Business Majority, the American Academy of Pediatrics, and many others, would give families access to tax credits if the cost of their family coverage at work exceeds 9.5 percent of their family income. It fixes an unintended problem with the way the ACA is being implemented that is now preventing families from getting the coverage they need.
Nothing came of the bill. It died in Congress. The Family Affordability Glitch still stands, keeping health insurance for many middle class families unaffordable.
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