What is the Family Glitch?
It refers to the fact that from 2014 through 2022, when the affordability of an employer-sponsored health plan was determined, it was based on just the cost for the employee.
The cost to add family members was not taken into consideration. But the affordability determination was then applied to all members of the family who could be added to the employer-sponsored health plan.
How Does the Family Glitch Effect You?
The rule change is fairly simple and straightforward:
Instead of basing the affordability determination for a family’s employer-sponsored health insurance on just the cost to cover the employee, the determination will now be made based on the cost to cover the employee plus family members, if applicable.
The Family Glitch Rule Story
Bob has health insurance through his employer. Bob’s wife Mary Belle and 3 children are covered under his health insurance. Prior to 2023 since Bob’s plan pays for his premium, then Mary Belle and children must remain on the plan.
Typical family plan for these dependents cost $20,000 per year. Beginning Nov 1 Mary Belle and the children will be allowed to apply to coverage through the marketplace. Suppose the household income is $80,000 then the marketplace premium for the dependents would be $700 thus saving the family $11,600 per year!