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Finally, A Fix for Covered California’s “Family Glitch”

The Biden Administration is finally going to fix the “family glitch” in the Obamacare subsidy system. Biden doesn’t need Congressional approval – it’s a regulatory process only. Thank goodness – finally, a permanent improvement to the ACA that Congressional Republicans can’t sabotage.

The family glitch is this: If an employee and their family are offered group health insurance, the whole family is ineligible for an ACA subsidy. The glitch is that employers don’t have to provide a subsidy for dependent coverage, only employee coverage.

So when such a family fills out an application on Covered California (and all the other ACA websites), you get to the question “have you been offered employer-sponsored coverage” and you’re supposed to check yes. That answer disqualifies you for an ACA subsidy, which can make the coverage crazy-expensive for that family.

The fix: If the total cost to cover the family on the employer-sponsored coverage is more than 10% of their Adjusted Gross Income, then the family will now be eligible for an ACA subsidy.

No word on when this fix will go into effect.