Employer-Sponsored Health Insurance and ACA Eligibility: Understanding the Implications

In the wake of recent changes in the Affordable Care Act (ACA), many individuals are evaluating their health insurance options, including the impact of employer-sponsored plans on their eligibility for ACA subsidies. This blog post aims to shed light on this topic, helping readers navigate the complexities of ACA insurance and make informed decisions about their coverage.

Employer-Sponsored Plans and ACA Eligibility

The ACA generally requires individuals to have health insurance coverage. However, there are certain exceptions to this rule, including when an individual has access to an employer-sponsored plan. In such cases, the individual is no longer eligible for ACA subsidies, which help reduce the cost of health insurance premiums.

The “Family Glitch”

In some situations, employees and their spouses may have access to separate employer-sponsored plans. This can lead to a situation known as the “family glitch.” Under the family glitch, an employee who has access to an employer-sponsored plan that includes family coverage is considered ineligible for ACA subsidies, even if their spouse does not have access to employer-sponsored coverage.

This can create a financial burden for families, as they may be unable to afford the full cost of health insurance premiums for both the employee and their spouse.

Recent Changes to the ACA

In October 2022, the Biden administration announced changes to the ACA that aimed to address the family glitch. These changes allow:

Individuals who are not eligible for coverage under an employer-sponsored plan (e.g., part-time employees) to qualify for ACA subsidies.
Employees who have access to an employer-sponsored plan that does not offer affordable family coverage for their spouse or children to qualify for ACA subsidies.

Implications for Individuals

The implications of these changes are significant for individuals who are currently employed and have access to employer-sponsored health insurance coverage. It is important to carefully evaluate the terms of your employer-sponsored plan to determine if you or your family members may be eligible for ACA subsidies.

If you believe you may be eligible for ACA subsidies, it is recommended that you contact a licensed health insurance agent or visit HealthCare.gov to determine your eligibility and apply for coverage.