Affordable Care Act: Employer-Sponsored Health Insurance and Marketplace Eligibility

Affordable Care Act: Employer-Sponsored Health Insurance and Marketplace Eligibility

The Affordable Care Act (ACA) has a provision that determines whether employer-sponsored health insurance is considered “affordable” for the purpose of eligibility for subsidized health insurance plans on the Health Insurance Marketplace. Determining affordability is essential because it can significantly impact your ability to access affordable health coverage.

What is considered affordable employer-sponsored health insurance under the ACA?

Under the ACA, employer-sponsored health insurance is considered affordable if the employee’s share of the premium for the lowest-cost self-only plan offered by the employer does not exceed a certain percentage of the employee’s household income. In 2023, this percentage is 9.61%. This means that if the employee’s share of the premium for the lowest-cost self-only plan is less than 9.61% of their household income, then the employer-sponsored health insurance is considered affordable under the ACA.

What if my employer’s health insurance is not considered affordable?

If your employer’s health insurance is not considered affordable under the ACA, you may be eligible to purchase a subsidized health insurance plan on the Health Insurance Marketplace. The Marketplace is a government-run website where you can compare and purchase health insurance plans from private insurers.

To be eligible for premium tax credits, which can significantly lower the cost of your health insurance plan, your household income must fall within a certain range. The income limits for premium tax credits vary depending on your family size and state of residence.

How can I determine if my employer’s health insurance is affordable?

To determine if your employer’s health insurance is affordable, you will need to calculate the percentage of your household income that goes towards the employee share of the premium for the lowest-cost self-only plan offered by your employer. If this percentage is less than 9.61%, then the employer-sponsored health insurance is considered affordable under the ACA. If the employee share of the premium is not affordable for your household income, you may be eligible for subsidized health insurance plans through the Marketplace.

I’m not sure if my employer’s health insurance is affordable. What should I do?

If you are not sure whether your employer’s health insurance is considered affordable under the ACA, you should contact a licensed insurance agent or broker. They can help you determine your eligibility for subsidized health insurance plans on the Marketplace