Analysis Estimates 5.1 Million People Fall into the Affordable Care Act’s “Family Glitch”

A new KFF analysis estimates 5.1 million people nationally fall into the Affordable Care Act’s “family glitch” that occurs when a worker receives an offer of affordable employer coverage for themselves but not for their dependents, making them ineligible for financial assistance for marketplace coverage.

The so-called glitch occurs because the ACA prohibits people with an offer of affordable employer coverage from purchasing subsidized coverage through the ACA marketplace. Under current rules, the affordability of employer coverage is based on what it would cost just to cover the worker and not their families.

Worker-only coverage with an out-of-pocket premium up to 9.83% of the worker’s household income is considered affordable, even if the additional cost of covering their dependents would push them above that threshold. President Biden hinted about a potential administrative fix to address the glitch in a recent executive order.

The analysis provides a demographic profile of those currently affected by the glitch:

• The vast majority (85%) are currently enrolled in employer-sponsored coverage and likely spending far more for their health insurance than people with similar incomes with subsidized coverage through the marketplace. Nearly a half million are uninsured.

• Most (54%) are children, and, among adults, most (59%) are women.

• Texas (671,000), California (593,000), Florida (269,000), and Georgia (206,000) have the largest number of people affected by the glitch.