The “Family Glitch” and Its Recent Fix

Understanding the “Family Glitch”:

The “family glitch” was a loophole in the Affordable Care Act (ACA) that prevented some family members from receiving premium tax credits (APTCs) to help pay for health insurance through the health insurance Marketplace. Under the glitch, if an employee had access to affordable health insurance through their employer, their family members were ineligible for APTCs even if the family plan was unaffordable.

The Fix to the “Family Glitch”:

On January 1, 2023, the Internal Revenue Service (IRS) implemented a fix to the family glitch. Under the new rule, family members are now eligible for APTCs regardless of whether the employee has access to affordable employer-sponsored coverage. This change allows more families to access affordable health insurance.

Implications of the Fix for Employers:

While the fix to the family glitch provides relief to families, it does not impose new requirements on employers. Employers are still responsible for offering affordable health insurance to their employees. However, they are not required to make affordable coverage available to family members.

Options for Employees with Unaffordable Employer-Sponsored Coverage:

Employees who have access to employer-sponsored health insurance but cannot afford the family plan can now take advantage of the APTCs to help cover the cost of a Marketplace plan. To qualify for APTCs, employees must meet certain income and citizenship requirements. They can apply for APTCs during the open enrollment period or through a Special Enrollment Period (SEP) if they experience a qualifying life event, such as a loss of employment or a change in family size.

Employer Considerations:

Employers should be aware of the fix to the family glitch and its potential impact on their employees’ health insurance choices. While employers are not required to make affordable coverage available to family members, they may consider offering such coverage as a benefit to attract and retain employees. Employers may also want to review their cafeteria plans to ensure that they are in compliance with the new rule.

Seek Professional Assistance:

If you need help understanding the family glitch fix or applying for APTCs, it is advisable to seek assistance from a qualified healthcare professional or licensed agent. Healthcare Navigators and agents can provide guidance and answer questions to help you make informed decisions about your health insurance coverage.