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ObamaCare 'Glitch" Affects Dependents and Employers

According to recent information, a situation with regard to employer coverage under the ACA (ObamaCare) may create severe hardship for dependents of employees participating in group health coverage plans through their jobs.

The way the bill was written (apparently the government can't fix it, either), a family offered health coverage through an employer plan who might otherwise be subsidy-eligible in the individual exchange would be prohibited from receiving that subsidy to buy there because the employer's plan meets the definition of 'affordable coverage'.  Here's where it gets sticky..............

Defined as affordable coverage in this situation means that the health premium for the employer plan does not exceed 9.5% of the family's income.  But that's not all...................

The 9.5% is keyed to the self-only coverage premium available to the worker, not his or her family. 

Generally employers will subsidize a portion of the employees health premium (in CA at least 50%) but often don't offer any cost-share for the spouse and dependents.  Also, dependent costs tend to be much higher than employee costs for health plans, sometimes three times as much.  The numbers in an article published by the Huffington Post quoting Kaiser Family Foundation suggest that a typical workplace health plan costs about $5,600 for an individual worker while family coverage in nearly three times higher at $15,700.  But............

The $15,700 won't enter the calculation for determining the affordability of the employer plan relative to the individual subsidy exchange (assuming the family would qualify for a subsidy), it will be based solely on the $5,600 self-pay premium for the employee.

This is another reason why I believe, when all of the information gets out there, employers may begin to drop health coverage, send their employees to the individual exchange for their subsidy and maybe assist with premium or give them a pay raise.  



  1. Am I right in understanding that if one parent has employer insurance the whole family is excluded from subsidies? I don't see how this will only affect 500,000 people. Seems like it will affect most families.


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