Your Health Idaho and the Family Glitch
Some new phrases you may have heard if you’ve been looking for insurance include the Family Glitch and the Fix to the Family Glitch. But if you’re like a lot of people, you may be wondering what the Family Glitch is and what’s meant by the Fix. Below is a little background information to walk you through whether you’re affected by the Glitch and what it might mean for you.
The Family Glitch has affected employees and their families who could only qualify for Advance Premium Tax Credits (APTC) through Your Health Idaho if the cost of their employer-based coverage was unaffordable based on a threshold set by the IRS each year.
- But by law, the affordability determination was based only on how much the employee would pay for insurance for themselves. The cost of adding family members was not included in the calculation; and the cost of a family plan is almost always far more expensive than employee-only coverage.
- These families of employees fell into the Glitch: they would either go uninsured or pay for unaffordable employer-based coverage.
The Fix to the Glitch states that eligibility for tax credits must now take into account the cost of family coverage and the cost of employee coverage independently.
- Beginning with 2023 health coverage, employees will be able to qualify for a tax credit through Your Health Idaho if their portion of the premium for their job-based health coverage exceeds 9.12% of their annual household income.
- Now, the cost of adding family coverage will also be taken into account as a separate calculation of whether the job-based health coverage offer for the total cost of the family plan exceeds 9.12% of annual household income.
Under the new rule, it may be that the employee remains on their employer plan because it’s more affordable and family members will qualify for tax credits that make a health plan through Your Health Idaho more affordable.
How to apply.
Understand your employer’s benefit offerings and premiums for the 2023 plan year
Create an account at YourHealthIdaho.org and apply for a tax credit. There is no risk in applying; you will not automatically be enrolled in coverage by applying.
If applying during your employer’s Open Enrollment Period and you are approved for a tax credit, get approved for a Special Enrollment Period through Your Health Idaho by submitting the requested documents.
If applying during Your Health Idaho’s Open Enrollment Period and you’re approved for a tax credit, continue with the application process.
Shop for plans available with a tax credit at Your Health Idaho and compare them to the plans offered by your employer.
Compare each plan’s deductibles, co-pays, provider networks, etc. If you’d like help finding the right plan for your family’s budget and lifestyle, help is available from certified insurance agents and brokers at no cost to you. Just visit YourHealthIdaho.org/find-help.
Decide which coverage is best for you.
If you decide to proceed with coverage through Your Health Idaho, find out from your HR department what your last day of coverage will be on your existing plan.
Finalize and enroll in a plan through Your Health Idaho.
Set up recurring payments with your new insurance carrier for the monthly premium.
Opt-out of your employer-based coverage.
Notify your employer of your decision not to renew your coverage with them.
Report Changes.
If there are ever any changes to your employer’s plan during their Open Enrollment Periods be sure you report those changes to Your Health Idaho. This will ensure that your employer’s plan is still considered unaffordable. Otherwise, you could be liable for APTC repayment when you file your taxes.
Frequently Asked Questions
- If a spouse and/or dependents are not enrolled in coverage, they can apply during Your Health Idaho’s Open Enrollment to find out if they qualify for a tax credit and then enroll.
- If a spouse and/or dependents are enrolled through employer-sponsored coverage, they can apply through Your Health Idaho during their employer’s Open Enrollment Period. If approved for a tax credit they can opt to not re-enroll with their employer.
NOTE: Filling out and submitting an application to determine tax credit eligibility does not commit the applicant to enrollment in coverage.
- The cost of employee coverage is deemed affordable if the employee’s annual premium does not exceed 9.12% of their annual household income (for 2023).
- The cost of an employer-sponsored family plan for a spouse and/or dependents is calculated separately but uses the same 9.12% of annual income to determine affordability.
- If coverage is deemed unaffordable for any family members, they will most likely be eligible for a tax credit and can shop for plans at YourHealthIdaho.org.
Yes, but only during their employer’s or Your Health Idaho’s Open Enrollment.
Important: People who intend to decline an offer of employer coverage should first apply with Your Health Idaho and ensure they a) are eligible for a tax credit and b) are eligible to enroll either during Open Enrollment or with a Qualifying Life Event.
Only if the employer employs more than 50 full-time employees.
No, there are no current rules mandating that employers provide affordable coverage for employees’ families.
Only wellness incentives related to tobacco use are factored into premiums used to determine tax credit eligibility. For example, if an employee is offered a plan at $200 a month at a smoking rate and the employee secures a $50 a month wellness benefit which reduces their premium to $150 a month, affordability would be calculated using the reduced premium of $150 a month.
If both parents have access to affordable health coverage, the cost of coverage for a family plan could still be deemed unaffordable, making the children eligible for a tax credit.