Fixing the ‘Family Glitch’ Is Important Step to Closing the Affordable Healthcare Coverage Gap for Small Businesses

"We are glad that the Biden Harris administration is taking steps to fix the so-called "family glitch" in the Affordable Care Act (ACA). This issue has plagued the small business community for years and has kept more than 5 million people from qualifying for subsidized healthcare plans and accessing cost-sharing reductions for marketplace coverage. By addressing the family glitch, more small business owners, their employees, and their families will be able to access and afford coverage.

Under the current rules, the ACA provides financial assistance through the individual marketplace to customers who would otherwise spend more than 9.83% of their income on their company's health plan premium for employee-only coverage. Most of the people caught in the ACA's family glitch now are insured through an employer but are paying very high premiums. In turn, hardworking low- and middle-income families have been blocked from getting affordable healthcare coverage through the marketplace because they or their spouse have been offered unaffordable employer-sponsored coverage. 

We know that many small businesses want to offer affordable healthcare benefits to their employees, but they can't afford to do so. Indeed, our research has found that healthcare costs are one of the biggest challenges for small businesses. More than 1 in 3 small businesses said they have struggled to obtain health insurance coverage for themselves and their employees during the pandemic. Fixing the family glitch will help many in the small business ecosystem by allowing more individuals to switch to ACA marketplace coverage with premium assistance. This is an important step to improving healthcare affordability and expanding access to critical coverage." 

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