If you're applying for ACA coverage in 2026 and think your family won't qualify for subsidies because one member has employer coverage, it's time to double-check. The so-called "family glitch" used to block millions from getting financial help, but it was fixed—and that fix still matters this year.
Let's dive into what the glitch was, how it's been resolved, and what it means for your family's eligibility in 2026.
What Was the ACA Family Glitch?
The "family glitch" referred to a flaw in the Affordable Care Act's original subsidy formula. Here's how it worked:
- If an employee was offered "affordable" health insurance through their employer, their entire family was considered ineligible for subsidies on the ACA Marketplace—even if the family plan was wildly unaffordable.
- "Affordable" was defined based on the cost of self-only coverage, not the cost to cover the entire family.
This meant:
- Families could be stuck with no affordable options
- They'd have to pay full price for Marketplace coverage
- Or be locked into high-cost employer plans
How the Glitch Was Fixed
In 2022, the IRS issued a new rule that redefined affordability for employer-sponsored insurance. Starting in 2023:
- Affordability is now based on the cost of family coverage, not just individual coverage.
- If the cost of employer-sponsored family coverage exceeds about 8.5% of household income, the family may now qualify for ACA subsidies.
This fix is still in place for 2026, which means more families are eligible for financial help.
Who Qualifies in 2026?
Your family may be newly eligible for ACA subsidies if:
- You're offered coverage through an employer
- The family premium (not just self-only) is more than ~8.5% of your household income
- Your income falls within the ACA subsidy range (typically 100% to 400% of FPL, or higher in some cases)
Even if you (the employee) take employer coverage, your spouse or kids can apply for ACA coverage with subsidies.
Real-Life Scenario
John's Family Saves with the Family Glitch Fix
Let's say John has employer coverage that costs $140/month for just himself—but $1,200/month to cover his wife and kids.
- Household income: $65,000/year
- 8.5% of income = $5,525/year or ~$460/month
- Since $1,200/month exceeds $460/month, the family can qualify for ACA subsidies while John keeps employer coverage.
👉 Try Our ACA Subsidy Calculator for 2026
See how much your family can save with the family glitch fix. Get instant results based on your income and household size.
Calculate Your Subsidy →Tips for Applying as a Mixed-Coverage Household
- File taxes jointly: Most ACA subsidies require joint filing for married couples.
- Submit accurate income estimates: Include wages, side gigs, rental income, etc.
- Review employer plan details: Get the cost of family premiums in writing.
- Be strategic: Sometimes it makes sense for one spouse to stay on the employer plan while the rest enroll through the Marketplace.
Need Help Navigating It?
The rules can be confusing, but you don't have to figure it out alone. Our ACA subsidy calculator guide can help you understand your options and estimate your savings.
You should also review the 2026 ACA income limits to see where your household falls in the eligibility range.
Final Thoughts
The family glitch fix opens the door to major savings in 2026. If you were previously told you didn't qualify for subsidies because of employer coverage, it's time to revisit your options.
Even if one person in your household gets employer insurance, the rest of the family might still qualify for help.
Use the tools available, double-check your numbers, and see what your family really qualifies for. You might be surprised how much you can save.