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The words "glitch" and "Obamacare" were commonly associated with one another during the Affordable Care Act’s first open enrollment period. While the technological problems that plagued state-based and federally facilitated health insurance exchanges may be more or less fixed, there is one Obamacare glitch that’s been there from the beginning and hasn’t gone away.
It’s a flaw that’s been dubbed the “family glitch.”
If your personal cost for job-based health insurance is less than 9.5 percent of your family’s income, then the Affordable Care Act considers it affordable.
As a result, neither you nor your family members can receive Obamacare subsidies for coverage purchased through a state-based or federally facilitated exchange.
This applies regardless of whether or not your employer’s coverage extends to your spouse and dependents and whether or not you would save money with an exchange-based plan.
And, although the 9.5 percent threshold applies to you, personally, it does not apply to job-based coverage you obtain for your spouse and dependents.
That means you could pay much more than 9.5 percent of your income for family coverage. That is the family glitch in a nutshell.
Don't expect a legislative fix to the family glitch anytime soon. The family glitch affects an estimated 4 million people. It could be fixed with an amendment to the Affordable Care Act. Some legal and policy experts even believe the administration could address the problem without amending the law.
Sen. Al Franken, D-Minn introduced legislation known as the Family Coverage Act, which would fix the glitch and help impacted families gain access to premium tax credits. The bill died in Congress in 2014, and the family glitch remains all but forgotten in Washington, D.C.
You may not be able to change your situation, but you can do things to help lower what you pay out-of-pocket toward your deductible and other healthcare expenses.
Supplemental coverage provides benefits for expenses your health insurance plan doesn’t cover. It does not replace your major medical plan, but instead complements them—whether they are job-based or purchased in the private market or through a state-based or federally facilitated exchange.
If you can afford job-based coverage for your dependents then by all means obtain that coverage. If you cannot afford to add your dependents to your job-based group health plan, consider obtaining short term medical coverage rather than allowing your dependents to go without coverage. While you still may be subject to the shared responsibility payment (i.e., the tax penalty), it will allow your dependents to have valuable coverage in the event of an unforeseen claim.
Call the number at the top of your screen to discuss supplemental options with one of certified advisors. They can help you find solutions that make sense for your family’s budget and healthcare needs.
Originally published May 20, 2016.
 Internal Revenue Service. “Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act.” Last reviewed or updated March 2, 2016. https://www.irs.gov/affordable-care-act/employers/questions-and-answers-on-employer-shared-responsibility-provisions-under-the-affordable-care-act
 Health Policy Briefs. “The Family Glitch.” Health Affairs. Nov. 10, 2014. http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=129
 Senator Al Franken. “Summary of the Family Coverage Act.” https://www.franken.senate.gov/files/documents/140605FamilyGlitch.pdf