The family glitch exists in a marriage when either a spouse or parent works for an employer who offers ‘affordable health care’.
If the employer offers health insurance that costs the employee less than 9.5% of income for the employee only coverage, it is considered affordable. Because of this the rest of the family cannot get tax credits through the health insurance exchange. I call this the “family glitch”.
Consider a family of four earning $40,000 per year in Reno, Nevada. They would otherwise be eligible for tax credits. With the changing health care system, they are no longer eligible for these tax credits. The result is the loss of about $5410 in tax credits for the remaining three non-working family members.
A married couple (each age 60) earning $40,000 per year in Reno are normally eligible for tax credits. Although, now they not qualify for these tax credits. This happens if either spouse’s employer offers affordable care. The result is the loss of about $4544 in tax credits for the remaining non-working spouse.
In both of these situations, the likely consequence is that the employee’s family members would go uninsured due to health insurance being unaffordable.
The Solution? For some, divorce. I have several clients who are considering divorce and a couple who have already done it. In the right circumstance, this solves the problem because the family glitch does not exist and the credits are available.
For an unmarried couple considering marriage and looking forward to a life together, facing the family glitch might result in the economic decision not to get married.
The whole idea of the Affordable Care Act was to get Americans insured. The family glitch not only prevents those in needs from getting affordable health insurance. It could also result in the breakdown of the institution of marriage.
Individual and Family Specialist