Family Glitch
♦ In 2027, insurance from your employer is considered affordable if the employee’s share of the premium for the lowest priced self-only plan available does not exceed 10.22% of an employee's household income.
The law initially considered the cost for insurance that would cover the employee only — not the employee’s family.
Your spouse and children could purchase insurance thorough the Marketplace.
But because you had affordable insurance through your employer your spouse and children would not be able to receive a premium tax credit or other savings.
This oddity in the law was called the “family glitch.”
It is estimated that the "family glitch" affected about 5 million Americans.
♦ In April 2022, the Biden administration proposed a rule change so that the cost of insurance would take into consideration the cost of covering the employee and their family members.
♦ In October 2022, the IRS issued a final rule change to "fix" the family glitch.
The rule change took place in time for plan year 2023 enrollment.
♦ If your individual work health insurance costs to you are "affordable" then you will be ineligible for Marketplace subsidies. You would likely be better to enroll in your employer's plan.
However, now your family members may shop on Healthcare.gov and may qualify for financial assistance. That was not the case before 2023.
Related content
• What is affordable coverage ?
• I believe my employer's plan is not affordable. What do I do ?
• Can my family buy a plan from the Marketplace if I have insurance through my company ?
