Estimates from the UCLA Center for Health Policy Research and the UC Berkeley Labor Center show that 391,000 Californians previously excluded from subsidies in Covered California would be eligible for them under the new rule. Of those, an estimated 149,000 would likely enroll in a Covered California plan. Those switching from an employer-sponsored plan would save an average of $1,478 per person in 2023, according to the two centers.

Nearly 391,000 of those caught in the glitch would qualify for subsidies on Covered California, the state-based insurance exchange, noted health policy researcher Miranda Dietz of the UC Berkeley Labor Center. She worked with colleagues at the UCLA Center for Health Policy Research to examine the impact of the changes in IRS regulations prior to their approval.

“This is one of the drawbacks of having a healthcare system that is tied to employment,” said Laurel Lucia, healthcare program director at the UC Berkeley Labor Center. “We saw during the pandemic, when there were furloughs or layoffs, people lost job-based coverage when they needed it most.”

According to the UC Berkeley Labor Center, the “glitch” impacts an estimated 615,000 people in California, mostly women and children from low and middle-income families. The center estimates that about 400,000 of those people would be eligible for financial assistance through Covered California based on their income.

According to estimates by UCLA and UC Berkeley, Altman said, almost half a million Californians have employer-sponsored coverage that is less affordable than what they will be able to obtain now on Covered California. An additional 87,000 Californians who could be helped by the new rule are uninsured today, and about 35,000 have policies that aren’t currently subsidized.