ACA Marketplace Affordability Calculator
Is Your Employer Sponsored Health Plan Considered Affordable according to ACA Marketplace health insurance guidelines?
Affordable coverage means that your portion of the premium that you pay for a self-only employer health plan that meets the minimum value standard is equal to or less than 9.61% of your total household income. If your coverage is considered affordable then you won’t qualify for a subsidy. Read more down below.
ACA Marketplace Health Insurance: When Your Employer Offers a Health Plan
There are some important things to consider when deciding on whether or not to enroll in ACA (Affordable Care Act) Marketplace health insurance, also known as Obamacare, when you have the option of enrolling in a group plan through your employer.
1. You won’t qualify for subsidies or tax credits if your employer plan meets certain criteria
If you are eligible for coverage through your employer, and that plan is considered “affordable”, then you will not qualify for subsidies or tax credits, even if your income would qualify you for them otherwise. Affordable coverage means that your portion of the premium you pay for a self-only employer health plan that meets the minimum value standard is equal to or less than 9.61% of your total household income.
If you have an offer of job-based insurance, the only way you'll qualify for savings on a Marketplace plan is if your employer's insurance offer doesn't meet minimum standards for affordability and coverage. Most job-based plans meet these standards.
You may pay more than 9.61% of your household income on monthly premiums if you're enrolled in your employer's spouse or family coverage. But affordability is determined only by the amount you'd pay for self-only coverage.”
Healthcare.gov
Here are some examples adopted from the ones offered on Healthcare.gov:
Example 1
- Employee's monthly household income = $3,750 (about $45,000 per year)
- 9.61% of the employee's monthly household income = $360
- Monthly cost to the employee of the lowest-priced plan the employer offers for self-only coverage = $300
- Is the plan affordable? YES. The employee's share of the lowest cost self-only plan ($300) is less than 9.61% of the employee's household income ($360).
Example 2
- Employee's monthly household income = $2,000 (about $24,000 per year)
- 9.61% of the employee's monthly household income = $192
- Monthly cost to the employee of the lowest-priced plan the employer offers for self-only coverage = $275
- Is the plan affordable? NO. The employee's share of the lowest-cost self-only plan ($275) is more than 9.61% of the employee's household income ($192).
In most job-based insurance plans, your employer contributes to portions of your premium to reduce the cost to you. If you purchase a marketplace plan your employer will no longer be paying portions of the premium for you.
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