Obamacare: Family glitch may prevent some families from qualifying for subsidies

FORT PIERCE, Fla. - The health exchanges are open, but the website is still not working. Users are having trouble signing up for an account to view the available policies. When you do get into the website, you may find another surprise. An issue known as a family glitch.

Your employee plan may be affordable, but what happens if the family coverage is too expensive? Some families may be surprised to find out they don't qualify for a subsidy in the marketplace because of a glitch in the system.

Like most employers, the St. Lucie County School Board is letting employees know the costs and coverage for insurance in 2014.

The letter gave Lisa Berk sticker shock.

"I was outraged. I was like 'really?' They're really going to charge that amount," Berk remarked.

The individual plan prices are affordable with prices around $7.20-$24.35 a paycheck.

The family plan will cost between $476 and $525 a paycheck.

"$12,000 a year for healthcare for a family is a lot when you are only making $31,000 a year," Berk said.

The School Board's Assistant Superintendent for Business Services, Tim Bargeron, said these prices are a result of a new union contract that's more sustainable, affordable, and equitable. They felt the current health plan was unsustainable because the Board's contributions toward insurance increased from $27M to $35M.

Bargeron wrote in a statement, "Many of us were asking ‘if we didn't have this huge health insurance burden, might we be able to give raises?'"

The board shifted around resources, decreasing benefit contributions but increasing salaries. The contract was agreed upon by the majority of employees, and the impact varies by employee.

The board is contributing significantly less toward health insurance with no contribution for dependents.

"You're damned now for having kids and to get them health care," Berk said.

Spouses and children can shop for insurance in the Health Insurance Marketplace, but Legal Aid licensed navigator, John Foley, said there's a catch.

"Unfortunately when they go to the marketplace, even though they would be eligible for subsidies based on their overall household income, they're not going to be because the government is going to consider them as having available coverage through their workplace or spouse coverage," Foley explained.

It's called a family glitch. The government bases its subsidies off an employee's individual coverage. It must be 9.5% of the household income. It doesn't matter if the family coverage is unaffordable.

"I think it's going to effect children to a larger extent because those are the plans that purchasing them individually would be very inexpensive and unfortunately as part of a group plan they are on the expensive side," Foley explained.

What's being done about it?

"It seems everyone acknowledges it that it's an unintended error but again getting the congress. Getting people to do anything in Washington is difficult at this point," Foley said.

Some employers have simply dropped family plans so the spouses and children can get a subsidy on the exchange.

Read the agreement, plan and letter here:


Print this article Back to Top