Is Your Employer-Provided Health Insurance “Affordable” Under the ACA Marketplace Guidelines?

The Affordable Care Act (ACA) has made significant changes to the healthcare landscape, including the establishment of health insurance marketplaces where individuals and families can purchase affordable health coverage. One of the key components of the ACA is its affordability guidelines, which determine whether an employer-provided health plan is considered “affordable” and therefore ineligible for premium subsidies through the marketplace.

What are the ACA Marketplace Affordability Guidelines?

According to the ACA, an employer-provided health plan is considered affordable if the cost of the plan to the employee is less than 8.39% of the employee’s household income. This is based on the employee’s household income, which includes the combined income of the employee and their spouse.

How to Calculate Affordability for Employer-Provided Health Plans

To determine if your employer-provided health plan is affordable, you need to calculate the cost of the plan as a percentage of your household income. Here’s how to do it:

1. Determine the cost of the plan: This is the monthly premium you pay for your health insurance, including any premiums paid by your employer on your behalf.
2. Estimate your household income: This is the combined income of you and your spouse, if applicable. You can use your pay stubs or W-2 forms to estimate your income.
3. Compare the cost of the plan to your household income: Divide the cost of the plan by your household income and multiply by 100 to get a percentage.

Example: If your monthly health insurance premium is $343 and your household income is $50,000, the cost of the plan as a percentage of your income would be:

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($343 / $50,000) x 100 0.686%
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Since the cost of the plan is less than 8.39% of your household income, the plan is considered affordable under the ACA marketplace guidelines.

Implications of an Affordable Employer Plan

If your employer-provided health plan is considered affordable, you will not be eligible for premium subsidies through the health insurance marketplace. This means that you will have to pay the full cost of your health insurance premiums without any financial assistance from the government.

On the other hand, if your employer-provided health plan is not considered affordable, you may be eligible for premium subsidies through the marketplace. This can help reduce the cost of your health insurance and make it more affordable for you and your family.

It’s important to note that the affordability of an employer-provided health plan is determined on an individual basis. This means that even if your employer offers the same health plan to all employees, the affordability of the plan may vary depending on each employee’s household income.

If you’re unsure whether your employer-provided health plan is affordable, you can use the affordability calculator provided by the Health Insurance Marketplace at [www.healthinsurance.org/obamacare/employer-health-plan-affordability-calculator/](https://www.healthinsurance.org/obamacare/employer-health-plan-affordability-calculator/). This calculator will help you determine if the plan is affordable based on your specific circumstances.