The “family glitch” refers to a gap in the original Affordable Care Act (ACA) rules that made some families ineligible for Marketplace subsidies, even though they couldn’t realistically afford family coverage.
Here’s how it worked:
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If an employer offered affordable employee-only coverage (based on the affordability percentage), the entire family was considered to have access to affordable coverage—even if the cost of adding dependents was far higher and unaffordable.
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As a result, the family couldn’t qualify for subsidies on the Marketplace, even though they faced high premiums for family coverage through the employer plan.
This was the “glitch”—affordability was measured based only on the cost for the employee, not the family.
🔧 Has the glitch been fixed?
Yes. Starting with 2023 plan years, a new federal rule changed how affordability is calculated:
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The employee’s coverage is still measured separately, but
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The cost of family coverage is now evaluated independently to determine whether the rest of the household can qualify for subsidies.
This change allows many families who were previously caught in the glitch to now qualify for premium tax credits through the Marketplace.