Advocates press administration to fix insurance subsidy regulations

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The proposed regulation, said vice president for health policy Judy Solomon, reflects "flaws in the legal analysis of the statute that we're going to press hard on. We're obviously going to be weighing in."

Still, Solomon said the proposed regulation unveiled last month offers a glimmer of hope because families who reject unaffordable employer coverage would not be hit with the healthcare law's individual mandate penalty for being uninsured. Solomon said regulators basically adopted advocates' definition when determining the mandate requirement, so they could yet come around to that definition when deciding who's eligible for subsidies as well.

Some experts are already weighing in with alternatives.

The Kaiser Family Foundation's Larry Levitt and Gary Claxton, for example, suggest that regulators look at a family's size and income and then determine whether employer-sponsored coverage is affordable. Another "hybrid" approach would be to calculate affordability for the worker and his or her family separately.

In a column, the two experts estimate there are about 3.9 million dependents who don't have access to affordable employer-sponsored coverage while the worker does.

"As implementation of the health reform law proceeds and regulations and guidance are issued, this is one of many seemingly technical issues that may have significant implications," they write. "It is the nature of insurance that in many cases — this one included — there may be large consequences for a relatively small number of people."