The 'Family Glitch' Is Fixed: How Texas Families Can Get Subsidized Coverage
What the old 'family glitch' did
For years, a quirk in the law trapped a lot of families. If you were offered health coverage at work, the government checked whether it was 'affordable' by looking only at the cost to cover you, the employee — not the much higher cost to cover your whole family.
So if your self-only plan was cheap but adding your spouse and kids cost a fortune, your family was stuck: the offer counted as 'affordable,' which blocked everyone in the household from getting a marketplace subsidy, even though family coverage was clearly out of reach. That trap was nicknamed the family glitch.
The 2023 fix, in plain English
Starting in 2023, the IRS changed the rule — and the fix is still in effect for 2026. Now there are two separate affordability tests:
- For the employee: is the self-only plan affordable (under 9.96% of household income for 2026)?
- For the family: is the family-tier coverage affordable, measured against that same 9.96% threshold?
These are now judged independently. That's the whole breakthrough: your family's subsidy eligibility no longer rides on how cheap your individual coverage is.
How it plays out
Because the tests are separate, families can end up split — and that's allowed:
- The employee may stay on the employer plan (their self-only coverage is affordable).
- The spouse and children may enroll in a subsidized marketplace plan, if the cost of the employer's family coverage exceeds 9.96% of household income.
You don't have to move everyone to the marketplace, and you don't have to keep everyone on the work plan. You choose the combination that costs your family the least.
A worked example
Say a Texas family has a household income of $90,000. At the employee's job:
| Coverage | Cost | Result vs. 9.96% ($8,964/yr) |
|---|---|---|
| Employee self-only | ~$120/mo (~$1,440/yr) | Affordable — employee stays on work plan |
| Adding spouse + 2 kids | ~$1,300/mo (~$15,600/yr) | Unaffordable — family can seek subsidies |
Under the old rule, the whole family was locked out because the employee's coverage was cheap. Under the fix, the spouse and kids can shop subsidized marketplace plans because the family-tier cost (about 17% of income) blows past the 9.96% line.
See what a subsidized plan costs for your spouse and kids.
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Splitting coverage is allowed
You can split the household. Keeping the employee on the employer plan while the rest of the family takes subsidized marketplace coverage is fully permitted — and it's often the cheapest overall arrangement. Run both scenarios before deciding.
What to do next
Ask your HR department for the monthly cost of both the self-only and the family-tier plan. Then compare the family cost against 9.96% of your household income. If it's over the line, your spouse and kids likely qualify for marketplace subsidies — and a licensed advisor can price the split-coverage option against keeping everyone at work.
Frequently asked questions
Is the family glitch fix still in effect in 2026?
Can the whole family move to the marketplace?
What's the 2026 affordability threshold?
Does the employee get a subsidy too under the fix?
How do I prove the family coverage cost?
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