“The average salary of North Carolina state employees is about $41,000,” Mr. Goodwin added, “and the cost of family coverage in the basic plan is $516 a month, which is not affordable for many state employees. Because employee-only coverage for this plan is provided at no cost to the employee, based on the proposed regulations, all family members would be prohibited from obtaining subsidies through the exchange.”
Dr. David I. Bromberg, a spokesman for the American Academy of Pediatrics, said, “The I.R.S.’s interpretation of the law could unravel much of the progress that has been made in covering children in recent years.”
The Service Employees International Union said the proposal “discriminates against marriage and families.”
Some of the most important provisions of the law will be carried out by the I.R.S. Besides offering tax credits to individuals and families, it will impose tax penalties on people who go without insurance and on businesses that do not offer it.
The agency said its reading of the law was supported by the Congressional Joint Committee on Taxation. The health care rules were drafted by “our legal experts—career civil servants who are some of the best tax lawyers in the world,” said Douglas H. Shulman, the I.R.S. commissioner.
The law says an employer with 50 or more full-time employees may be subject to a tax penalty if it fails to offer coverage to “its full-time employees (and their dependents).” However, more than two years after President Obama signed the law, the employer’s obligation to dependents is unclear.
In explaining how the penalty is to be computed, the law does not mention dependents. Employers pay a penalty only if one or more full-time employees receive subsidies.
Companies are less likely to offer or pay for coverage of dependents in industries with low wages and high turnover, like restaurants.
Some employers and members of Congress have suggested a possible compromise. The government would still look at the cost of “self-only coverage” in deciding whether insurance was affordable to an employee. If family coverage under the employer’s plan was too expensive, a family could get subsidies to buy insurance for dependents in the exchange, and the employer would not be penalized.