Family Glitch Fix

The Internal Revenue Service (IRS) issued a new rule in early 2023, called “The Family Glitch”.

This new rule reversed the IRS’ most recent affordability standard, which was implemented in 2013. The affordability of a plan was based on the cost of the employee-only coverage. This prevented family members of an employee who had access to an affordable employer sponsored health plan from receiving premium subsidies for ACA health insurance coverage.

Now, the “Family glitch” bases affordability on the total cost for family coverage. If a family pays more than a certain percentage of household income (9.12% in 2023) for their employer-sponsored health plan, that family may be eligible for premium tax credits through the Marketplace regardless of whether the employee in the family has what’s deemed “affordable” insurance or not. This means dependents of the employee can now qualify for tax credits in cases where the employee doesn’t.

Case Study

The Centers for Medicare & Medicaid Services (CMS) released a case study (p. 5-6) with a real life scenario showing how a couple named Paul and Lisa, who are married and file a joint tax return, can now qualify for premium subsidies without being on the same plan. Make sure to check out the other scenarios listed in the case study.

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Coverage Options

If coverage is considered affordable for the employee but not the employee’s family members.

Split Coverage
(Employer and Marketplace)

  • The employee could enroll in the affordable employer coverage, while their family members enroll in a Marketplace plan with APTC (applied premium tax credit) and CSRs (cost sharing reductions), if otherwise eligible.

Marketplace Coverage Only

  • The employee could decline the affordable employer coverage and the whole family could enroll in a Marketplace plan.
  • The family will pay full price for the employee’s portion of the Marketplace plan premium, while the other family members’ portion would be lowered by using APTC and/or CSRs if they are otherwise eligible.

Employer Coverage Only

  • The whole family could enroll in the employee’s offer of employer-sponsored coverage. While someone is enrolled in employer coverage, they are not eligible for the APTC or CSRs for a Marketplace plan.

Note: If both an employer-sponsored plan and Marketplace plan are purchased, there will be two different networks, Rx drug coverage and separate deductibles to meet.

Have Questions or Need Additional Information?

BCBSOK Mobile Assistance Center (MAC)

The MAC Team consists of licensed BCBSOK community outreach specialists who can help your employees find a more affordable option for their family. They are also customer service advocates and provide one-on-one education and customer service for consumers and BCBSOK members.

BCBSOK Individual Sales

Contact one of our Blue Cross and Blue Shield of Oklahoma (BCBSOK) Individual Producer Sales Consultants for assistance in locating a broker or to answer your sales questions.

Zane Whitlow
Sr. Producer Sales Consultant
Zane_whitlow@hcsc.net
1-918-408-3485

Damian Merrill
Sr. Producer Sales Consultant
Damian_merrill@bcbsok.com
1-405-365-2858