If you’re employed and have access to employer-sponsored health insurance, you may wonder if it’s affordable for you and your family. The Affordable Care Act (ACA) sets guidelines for what is considered affordable employer coverage and how it affects your eligibility for tax credits and subsidies through the Health Insurance Marketplace. In this blog, we’ll explore the affordability requirements for employer-sponsored insurance and provide insights into your options if the coverage is not affordable for your family.

Employer-Sponsored Insurance: Affordability Requirements

Under the ACA, employer-sponsored insurance is considered affordable if the premiums for employee-only coverage do not exceed a certain percentage of your household income. For 2023, this percentage is 9.12%. In other words, if the premiums for employee-only coverage cost more than 9.12% of your household income, the coverage is considered unaffordable.

What Happens if Employer Coverage is Not Affordable?

If the employer-sponsored insurance is not affordable for your family, you may be eligible for tax credits and subsidies through the Health Insurance Marketplace to help pay for coverage through a Marketplace plan. These credits and subsidies are known as the Advance Premium Tax Credit (APTC) and the Cost-Sharing Reduction (CSR).

To qualify for the APTC, you must meet certain income requirements and have an employer-sponsored plan that is not affordable for you and your family. The CSR helps reduce the out-of-pocket costs for Marketplace plans, such as deductibles, copays, and coinsurance.

Splitting Coverage: Employee-Employer, Family-Marketplace

In some cases, it may be possible to split coverage between an employer-sponsored plan for the employee and a Marketplace plan for family members. If the employer-sponsored plan meets the affordability requirements for the employee but not for family members, the family members may be eligible for APTC and CSR through the Marketplace.

Seeking Assistance: Healthcare Navigators

Navigating the complexities of health insurance can be daunting. Healthcare navigators are trained to help individuals and families understand their health insurance options and enroll in the most suitable plans. They can provide guidance on affordability requirements, eligibility for tax credits and subsidies, and the process of splitting coverage.

Conclusion

Understanding the affordability requirements for employer-sponsored insurance is crucial for making informed decisions about your family’s health coverage. If the employer coverage is not affordable for your family, you may be eligible for tax credits and subsidies through the Health Insurance Marketplace. Splitting coverage between an employer-sponsored plan for the employee and a Marketplace plan for family members can be an option to consider. Healthcare navigators can provide valuable assistance in navigating these options and ensuring you and your family have the coverage that meets your needs and budget.