11/30/2023
Here is what I wish more people knew about Marketplace/ACA insurance;
The rules and applications of the “Family Glitch”
To summarize the family glitch, is a piece of legislation that says if employer provided insurance is deemed unaffordable, the family can get health insurance on the Marketplace (ACA) with government subsidy money that they qualify for.
The number for 2024 is 8.39% of gross (or net if 1099) income going towards health insurance is unaffordable.
“But Renie, what in the world does that even mean??”
Let’s use an example I’m currently working with. I’m writing a group health insurance plan for a small business, 28 employees.
The cost for employee only is 500 a month, which the employer is responsible for 50% ( or $250/mo). The effect cost for the employee is $250/mo.
If the employee makes 50k a year, this coverage is deemed affordable because $250/month * 12 months = $3000 and $3000 /$50000 = 6%
“But Renie, what if he has a family?”
AH HAH! That’s where the family glitch gets its name.
The cost for the employee + spouse is $1,000 a month, of which the employer will only cover $250, as they are only responsible for 50% of the EMPLOYEE ONLY cost. The effective cost is now $750/mo
Same calculation as above - we see that it takes 18% of the family budget. It is now unaffordable.
So the employee goes on employer coverage for $250 a month, and the spouse goes on Marketplace and gets a subsidy from the government (in this case 238/mo) which brings down their cost to $150 a month (after subsidy).
Instead of paying $750 every month, they now pay $500 for the both of them (or 12% of their annual income).
They cut their costs in half. And don’t get me started on if there are children as well, usually that number changes even more.
“So what do I do here Renie?”
Simple. Reach out to to see if you’re in the best plan for your specific situation!
