Your spouse’s employer plan may be affordable for the employee without being affordable for the rest of the family. Since 2023, the IRS has assessed those costs separately. For 2027, family coverage costing more than 10.22% of household income may allow the spouse and children to qualify for a Your Health Idaho tax credit, even when the employee doesn’t qualify.
Families often ask whether they have to use an employer’s plan when adding a spouse and children makes the premium difficult to afford.
The answer depends in part on the affordability test. The family glitch fix changed that test for spouses and children beginning in 2023, so an affordable employee-only premium no longer settles the question for the whole family.
Here’s how to assess the offer and compare your options.
Can we get a Your Health Idaho tax credit if my spouse’s job offers insurance?
Maybe. If the job-based coverage counts as affordable and meets the minimum-value standard, the people it’s affordable for can’t get a premium tax credit. If it isn’t affordable for them, they can be considered for one.
The key is that affordability is measured person by person, against your household income (modified adjusted gross income for everyone on the tax return), not against the paycheck of the person who has the job. A plan can be affordable for the worker and unaffordable for the spouse and kids at the same time.
I start by asking about household size and income because those figures are needed to assess affordability and potential financial help.
What does “affordable” mean for 2027?
For plan years beginning in 2027, job-based coverage generally counts as affordable if the employee’s share for self-only coverage on the lowest-cost plan that meets minimum value is no more than 10.22% of household income (IRS Rev. Proc. 2026-26).
Use the exact IRS figure of 10.22% in the calculation rather than rounding it to 10.2%.
| Plan year | Affordability limit (share of household income) | Source |
|---|---|---|
| 2026 | 9.96% | IRS Rev. Proc. 2025-25 |
| 2027 | 10.22% | IRS Rev. Proc. 2026-26 |
Check the employer’s plan year, which may begin mid-year. If the current plan year began in 2026, ask whether the 9.96% or 10.22% threshold applies to the period you’re comparing.
What was the family glitch, and how was it fixed?
The “glitch” was that, for years, the IRS judged affordability for the whole family using only the worker’s self-only premium. If the worker’s own coverage was cheap, the spouse and kids were treated as having an affordable offer too, even when adding them cost far more. Those families couldn’t get tax credits.
A Treasury final rule fixed it (Treasury Decision 9968, 87 FR 61979). For tax years beginning in 2023 and later:
- The worker’s affordability is still tested on the self-only cost.
- Family members’ affordability is tested on what it costs the worker to cover themselves and those family members.
- Family members also get their own minimum-value test.
The fix didn’t change the employer penalty rules. It changed who in your family can be looked at for a credit.
How do I run the numbers for my family?
Take two numbers from your spouse’s open enrollment materials, the employee’s monthly cost for self-only coverage and for family coverage, and compare each to 10.22% of household income.
The following example uses hypothetical premiums and income to illustrate the calculation:
- Household of four. Household income (MAGI) of $80,000.
- 10.22% of $80,000 is $8,176 a year, or about $681 a month. That’s the line.
- Employee’s cost for self-only coverage: $200 a month ($2,400 a year, 3.0% of income).
- Employee’s cost for family coverage: $950 a month ($11,400 a year, 14.25% of income).
| Who | Cost tested | Share of income | Under 10.22%? | Result |
|---|---|---|---|---|
| The worker | Self-only, $2,400/yr | 3.0% | Yes | Affordable offer, so no tax credit |
| Spouse and two kids | Family coverage, $11,400/yr | 14.25% | No | Not affordable, so they may qualify for a credit |
In this example, the worker keeps his own coverage at work. His wife and kids could apply through Your Health Idaho and be considered for a premium tax credit. At $80,000, this family is about 242% of the federal poverty level for a household of four, so they’re inside the credit range. The children are also above Idaho CHIP’s 185% limit, which is why the Marketplace is the next stop.
When you’re close to the threshold, use the actual premiums and a careful income estimate rather than rounding the figures.
Does the 400% cliff change the answer in 2027?
Yes, and this is the part that’s new for a lot of families. The extra federal subsidies from 2021 through 2025 expired after 2025, and Congress hasn’t renewed them as of October 2026. For 2027 coverage, premium tax credits are again limited to households at or below 400% of the federal poverty level (IRS Rev. Proc. 2026-26).
Based on the 2026 poverty guidelines used for 2027 coverage, 400% works out to:
- $63,840 for one person
- $86,560 for two
- $109,280 for three
- $132,000 for four
Above that income cutoff, the affordability fix doesn’t create eligibility for a credit. For example, a four-person household earning $140,000 would need to compare options without a premium tax credit under the rules described here.
One more change for 2026 and later tax years: there’s no cap on paying back excess advance credits anymore. If your household income comes in higher than you estimated, you can owe the full difference when you file. If your spouse gets a raise or picks up overtime, report it to Your Health Idaho as soon as it happens.
Should the whole family switch, or just my spouse and kids?
Usually it’s a split: the worker stays on the job’s self-only plan and the rest of the family goes through Your Health Idaho. The worker generally can’t get a credit if their own offer is affordable, so moving them too would mean paying full price.
Separate plans can involve different networks and deductibles. Review these trade-offs before deciding:
- Two deductibles and two out-of-pocket maximums. One for the worker’s plan, one for the family’s Marketplace plan.
- Two networks. Check that the kids’ pediatrician and your usual clinic are in the Marketplace plan you pick.
- Silver may matter. If household income is between 100% and 250% of the federal poverty level, a silver plan through Your Health Idaho can also come with cost-sharing reductions.
- Kids may land somewhere else. At lower incomes, children can qualify for Idaho Medicaid or CHIP. Our Idaho Medicaid and CHIP guide covers the income limits.
Our comparison of group vs. individual health insurance covers the two options in more detail. Choose based on the costs and coverage available to your family.
When can we make the switch?
The cleanest time is Idaho open enrollment, October 15 through December 15, 2026, for coverage starting January 1, 2027. That’s earlier than the HealthCare.gov dates in national news, and Idaho has no January window. Our Idaho open enrollment guide has the full calendar.
Line it up with your spouse’s employer enrollment so nobody ends up double-covered or with a gap. Ask HR when dropping the family tier takes effect.
Outside open enrollment, Your Health Idaho lists unaffordable employer coverage among its qualifying events for a special enrollment period, and it asks for documentation. If the family’s job-based coverage ends altogether, see how a special enrollment period works after losing employer coverage.
Frequently Asked Questions
What is the family glitch?
Before 2023, the IRS judged whether job-based coverage was affordable for the whole family using only the worker’s self-only premium. Families with expensive dependent coverage were locked out of Marketplace tax credits. A 2022 Treasury rule fixed that starting in 2023 by testing family members against the cost of family coverage.
What is the employer coverage affordability percentage for 2027?
For plan years beginning in 2027, job-based coverage is generally affordable if the employee’s share is no more than 10.22% of household income, per IRS Rev. Proc. 2026-26. For 2026 plan years the figure is 9.96%. If your spouse’s plan year doesn’t start in January, ask which percentage applies.
Can my spouse and kids get Your Health Idaho tax credits if I stay on my work plan?
They may, if covering them on your job’s plan costs more than 10.22% of household income for 2027 and your household is at or below 400% of the federal poverty level. You would keep your own work coverage, and they would enroll through Your Health Idaho instead of the employer’s family tier.
Does the family glitch fix help if we make too much for a tax credit?
No. The fix only changes who can be considered for a credit. For 2027, credits are limited to households at or below 400% of the federal poverty level, which is $132,000 for a family of four based on the 2026 guidelines. Above that, there’s no credit as of October 2026.
When can we switch the family to Your Health Idaho?
Idaho open enrollment for 2027 coverage runs October 15 through December 15, 2026, with coverage starting January 1, 2027. Outside that window, Your Health Idaho lists unaffordable employer coverage among its qualifying events, and it asks for documentation.
Contact us with the employee-only and family premiums from your spouse’s benefits packet. We’ll compare them with your household income and check the Your Health Idaho options. Idaho agents don’t charge the person enrolling for help with Your Health Idaho.
This article is general information, not tax or insurance advice, and not an offer of coverage. Tax credit eligibility depends on your household income, family size and the specific employer offer, and federal rules can change; figures are as of October 2026. Check YourHealthIdaho.org, talk with a licensed agent, and confirm tax questions with a tax professional.
About the author:
Kyle leads Eagle Cap Insurance, an independent agency serving eastern Idaho since 2008 from offices in Ammon (Idaho Falls area) and Preston. He works with dozens of carriers to help families and employers with health, life, disability and business benefits.
