Proposed Health Insurance Rule to Fix the “Family Glitch” in 2023

On April 5, 2022, the Biden Administration released a proposed rule to fix the family glitch. The family glitch refers to how the Affordable Care Act works with family members of an employee receiving an offer of group health insurance from their company. Currently if someone is offered group health insurance that is affordable for JUST THE EMPLOYEE then the employees dependents can not get a subsidy on the individual and family marketplace. Employers are only required to cover part of the employees insurance so this can lead to situations where the employees has affordable coverage but the employees dependents will have to pay full price, usually 1,000s of dollars. Since they cannot get a subsidy on the marketplace those plans will be 1,0000s of dollars as well. This can be a real burden for some families and it has needed a solution for years.

The proposed fix is quite simple, when calculating affordability, employees family will be taken into the equation. So if the cost to the family is deemed unaffordable (because many times employers do not contribute towards the family members costs), the family can then get a subsidy on the individual marketplace. This will not completely fix the problems in the health insurance world but it is a step in the right direction. The IRS will have a public hearing on June 27, 2022 that the public can submit comments for.

Fact Sheet on Proposed Rule:

Full Proposed Rule:


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