Unlocking Your Company’s Health Insurance Option Despite Income Changes

If you’ve recently received a raise, you may be in a similar situation to the individual in the post, wondering if you’re now eligible for your company’s health insurance plan. Understanding the rules surrounding qualifying life events (QLEs) is crucial in determining your options.

Qualifying Life Events for Company Health Insurance Coverage

Certain life events, as defined by the Affordable Care Act (ACA), qualify you to enroll in your employer’s health insurance plan outside of the open enrollment period. One such event is a change in income.

In most states, including California, a significant increase in salary may constitute a QLE. However, it’s important to note that each state has its own regulations regarding QLEs. To confirm if your salary increase qualifies as a QLE in California, you should contact your company’s benefits administrator or the health insurance carrier directly.

Employer-Sponsored Insurance vs. ACA Marketplace Coverage

If your income change is considered a QLE, you may be eligible to enroll in your company’s health insurance plan. Employer-sponsored plans typically offer lower premiums and higher coverage than those available through the ACA marketplace. However, they may also have higher deductibles and copays.

In the post example, the individual’s company offered a plan for $50 per month, while their ACA plan cost $1 per month. If the company plan satisfies the “affordability” criteria (less than 9.69% of annual income), the individual would not qualify for any premium tax credit under the ACA. This means they would be paying the full premium for their ACA plan without any government subsidy.

Financial Implications of Dropping ACA Coverage

The individual mandate, which required most Americans to have health insurance or pay a penalty, has been repealed for months beginning after December 2018. However, the penalty is still in effect for 2018 coverage. Additionally, dropping ACA coverage without enrolling in another health plan may result in a tax surcharge on your 2018 tax return.

Therefore, it’s generally advisable to maintain health insurance coverage, even if you don’t expect to use it frequently. Unexpected medical expenses can accumulate quickly, and having insurance can provide peace of mind and financial protection.

Next Steps

If you believe you are eligible to enroll in your company’s health insurance plan due to a change in income, contact your company’s benefits administrator or the health insurance carrier. They can guide you through the enrollment process and help you determine the most cost-effective option for your situation.

Remember that licensed agents can provide expert advice and assist you with navigating the complexities of health insurance. By seeking their help, you can ensure that you have the coverage you need at a price you can afford.