The 'Family Glitch' is Fixed: The IRS' New Rule Explained

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The health insurance landscape in the United States underwent a significant transformation with the introduction of the Affordable Care Act (ACA). A decade later, the ACA continues to evolve, addressing issues such as the "Family Glitch" that have arisen over time. This article dissects the intricacies of the Family Glitch and the IRS's new rule aimed at rectifying it, offering clarity on its impact on American families and the health insurance marketplace.

Understanding the Concept of "Family Glitch"

The term "glitch" often implies a minor issue, but when it comes to the Family Glitch in the ACA, the implications are anything but trivial. The glitch refers to a loophole introduced in 2013 that has historically made it difficult for some families to afford health coverage by denying them access to subsidized health plans on the ACA marketplace.

The Impact of "Family Glitch" on Society

The Family Glitch has particularly affected families where an employer offers an individual health plan that is considered affordable but does not extend affordability to family members. Consequently, family members have found themselves ineligible for premium tax credits for purchasing insurance through the ACA marketplace, often leading them to remain uninsured or face unaffordable health coverage costs.

Potential Solutions to Address the "Family Glitch"

A key solution has been the IRS's new rule, which reinterprets affordability criteria for family members, potentially expanding subsidy eligibility to family members based on the cost of a family plan rather than an individual's health plan alone.

ACA Family Glitch

Exploring the Genesis of the ACA Family Glitch

The ACA Family Glitch originated from the way the IRS interpreted the law's wording. The ACA stipulated that employer-sponsored insurance must be affordable, not exceeding a certain percentage of household income and providing minimum value. However, the affordability was based solely on the cost of coverage for the employee, not the family.

The Consequences of the ACA Family Glitch on Health Insurance

This interpretation led to a significant coverage gap, where employer-sponsored insurance was affordable for the employee but not for their family members, making them ineligible for subsidized coverage through the ACA marketplace.

Investigating Changes in the ACA Family Glitch Over Time

Despite widespread recognition of the problem, the Family Glitch remained unresolved for years, largely due to political gridlock and differing opinions on how to best amend the law.

Changes and Potential Resolutions for Family Glitch in 2023

For 2023, the Biden administration has proposed a new rule to fix the Family Glitch. This could redefine the affordability threshold for family members, offering them a path to obtain subsidized coverage.

Assessing the Potential Impact of Family Glitch on the Future of ACA in 2023

The proposed changes for 2023 are expected to significantly reduce the number of uninsured, as families that were previously ineligible for subsidies would now become eligible, according to HHS projections.


How the Affordable Care Act Contributes to the Family Glitch

The ACA, while revolutionary, has its imperfections, and the Family Glitch is a byproduct of these shortcomings. The ACA's complex structure of subsidies, employer-sponsored coverage, and eligibility criteria inadvertently created this issue.

Policies Addressing the ACA's Family Glitch

New policies and IRS rules aim to adjust the ACA's framework to ensure that affordability measures consider the cost of securing a family plan, not just individual coverage.

Mitigating the Effects of the Family Glitch Within the Scope of the ACA

To mitigate these effects, the Treasury Department and the IRS have worked on revisions that reflect the current administration's goals to expand access to affordable care.

Addressing the Top Questions

What percentage is the family glitch for 2023?

The percentage defining affordability for the Family Glitch in 2023 is anticipated to be recalculated based on the cost of a family plan rather than an individual plan alone.

What is a family glitch?

The Family Glitch refers to a loophole in the ACA that results in some families being ineligible for subsidized health insurance if an individual health plan is available to one family member through an employer.

Has ACA family glitch been fixed?

As of the new rule proposed by the IRS, there is a solution on the horizon for 2023 that intends to fix the ACA Family Glitch.

What is the ACA 2023 affordability?

The ACA 2023 affordability for families will be redefined by the new IRS rule, potentially lowering the percentage of household income required for a plan to be deemed affordable.

What is the family glitch in Obamacare?

The Family Glitch in Obamacare is the issue where families cannot access premium tax credits if they have access to an employer's affordable plan for an individual worker but not for the family.

What is the IRS final rule family glitch?

The IRS final rule on the Family Glitch is a reevaluation of the affordability standards for families to ensure equitable access to premium tax credits.

What is the family glitch in health insurance?

In health insurance, the Family Glitch is a barrier that prevents families from obtaining affordable coverage due to a narrow interpretation of affordability based on individual coverage through an employer.

How many people are affected by the family glitch?

The KFF estimates that several million people are affected by the Family Glitch, facing unaffordable premiums for family coverage.


The Family Glitch has stood as a testament to the complex and sometimes counterintuitive outcomes of well-intentioned policy. The IRS's new rule, reflective of ongoing efforts to refine the ACA, heralds a significant change that could extend affordable health coverage to millions more Americans. With continued vigilance and adjustments, the ACA can better deliver on its promise of comprehensive, affordable health care for all.

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