Health Insurance
Family Glitch
The IRS fixed the family glitch in 2023, allowing family members to access marketplace premium tax credits when employer family coverage is unaffordable.
Last reviewed: May 2026 · Editorial methodology
Definition
The 'family glitch' was a longstanding interpretation of ACA affordability rules under which a worker's entire family was deemed to have access to 'affordable' employer-sponsored insurance if the employee's individual premium was below the ACA affordability threshold — regardless of how much the employer charged to add family members. Because marketplace subsidies are unavailable when affordable employer coverage exists, this rule blocked millions of family members from accessing premium tax credits even when family coverage cost thousands of dollars per year. The IRS issued a final rule effective January 1, 2023, correcting this interpretation: affordability of family coverage is now assessed based on the cost of family coverage, not just the employee's solo premium. Families whose employer-sponsored family coverage costs more than the ACA affordability threshold (9.02% of household income in 2026) may now qualify for marketplace premium tax credits for family members, even if the employee's own coverage is affordable. This fix was projected to make approximately 1 million people newly eligible for marketplace subsidies.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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