Arizona Health Insurance ACA Family Glitch

Federal Government Proposes to Fix Family Glitch

At present, what the federal government considers “affordable” when it comes to employer group health insurance and what the employee and family considers affordable are usually two different things. In 2022 the federal government defines affordable coverage as costing 9.61% or less of the employee’s household income for self-only coverage. The cost of adding dependents is not considered. If an employee is offered “affordable” coverage today neither they or their family qualifies for a tax subsidy on Marketplace plans. This issue is known as the Family Glitch.

In 2023 the 9.61% figure drops to 9.12%. The Family Glitch issue will hopefully be fixed by taking the cost of adding dependents into consideration when calculating the 9.12% household income figure. If the cost to insure the full family is not affordable by government standards, then the family will qualify for a tax subsidy on Marketplace plans. If, on the other hand, the employee only premium is affordable the employee will not qualify for a subsidy, but the dependents will.

Marketplace plans being offered by Arizona health insurance companies are much better than they were just two years ago. Marketplace PPO plans are now available in Maricopa County and others, with hopes that such offerings continue in 2023.