Can you get Covered CA Subsidies if your
Employer offers “Affordable Health Coverage?”
If your employer health plan offers you affordable coverage and it has
- “minimum value [Bronze 60%]” and
- your contribution is less than 9.83% of income for employee SELF ONLY in 2021 SHRM * (CFR 1.36 B 2 * ThomsonReuters * Revenue Procedure 2018-34 * Revenue Procedure 2014-62) * Western Poverty Law * Health Care.gov * Publication 974 * Revenue Procedure 2020-36 *
neither you or your family qualifies for the APTC Advance Premium Tax Credit-subsidy from Covered CA, Health Care.Gov or any exchange. Covered CA FAQ
This employee only contribution percentage is all the Employer Shared Responsibility Mandate Provision requires to avoid penalties for employers with over 50 employees.
It doesn’t matter if covering your whole family coverage would go over the 9.83% limit. That just the way the law and rulings work. Some call this the “Family Glitch.”
There is some talk about fixing this SNAFU, but it would likely involve changing the eligibility calculation for marketplace subsidies — pegging the affordability standard to the coverage cost of the whole family rather than just an individual’s coverage. Doing so would increase federal spending by about $9 billion or $10 billion, since many more people would qualify for subsidies. CA Health Line *
Note that if rates increase or employer contribution lowers, that may trigger a special enrollment period, rather than wait for open enrollment.
I learned the word SNAFU Situation Normal, All Fouled Up in the dorm, when I attended San Diego State in the early 70's and earned a degree in Insurance. In all that time, I've never been able to use the word in a sentence, until last 10.1.2013, when Covered CA.com, Health Care.Gov nor the Insurance Company Websites or my own Quote Engine that I pay around $250/month for were supposed to launch, but did not do it properly.
- Interactive Tax Assistant (ITA)
- Am I eligible to claim the Premium Tax Credit?
- IRS FAQ on Premium Tax Credit
- Learn More About Your Health Insurance Tax Documents | Covered California VIDEO
- turbo tax.com
- H & R Block
- E file.com
- Estimate the Subsidy for Health Insurance, benefits, premiums, etc.
- 8962 ONLINE Calculator
- Tax Form Calculator.com
- e tax.com
- Marriage Higher or Lower Taxes?
Questions About 8% Rule and possible Exemption from Mandated Health Insurance
Question if Employer Coverage offered?
Another Question for ANY Health Care Program
Citations & Details
Example 2. Basic determination of affordability for a related individual. The facts are the same as in Example 1, except that C is married to J and X’s plan requires C to contribute $5,300 for coverage for C and J for 2014 (11.3 percent of C’s household income). Because C’s required contribution for self-only coverage ($3,450) does not exceed 9.5 percent of household income, under paragraph (c)(3)(v)(A)( 2 ) of this section, X’s plan is affordable for C and J, and C and J are eligible for minimum essential coverage for all months in 2014 CFR §1.36 B 2 Eligibility for Premium Tax Credit
However, the cost of a family plan is often higher, but the ruling means that those higher costs will not be considered even if the extra premiums push the cost of coverage above the 9.5% income threshold. The New York Times said this could leave 2–4 million Americans unable to afford family coverage under their employers’ plans and ineligible for subsidies to buy coverage elsewhere. Wikipedia
Alternatives – Solutions?
One possible solution to the Family Issue would be to have the Employer get a program thru the SHOP exchange, Kaiser Direct or check with us [email protected] many other companies may do it, exclude dependents, then they are NOT eligible and can then select “None of the Above” and get subsidies based on household income.
Under the law, those workers whose employers offer “affordable coverage” will not be eligible for subsidies in the exchanges. To be eligible, per the law’s definition, the cost of employer-based health insurance must exceed 9.5% of the worker’s household income. In January 2013 the Internal Revenue Service (CFR 1.36 B 2) ruled that only the cost of covering the individual employee would be considered in determining whether the cost of coverage exceeded 9.5% of income.
Metal Levels – Bronze 60% Actuarial Value –
Minimum Value Definition ==>An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan. See Notice 2014-69 for additional guidance regarding whether an employer-sponsored plan provides minimum value coverage if the plan fails to substantially cover in-patient hospitalization services or physician services IRS.gov * Covered CA Bulletin page 2 * Our Ben E Lect Webpage * Employer is mandated to tell you 1095 C * IRS Notice 2012-31 *
Related Pages, Links & Resources in the subsidy and tax credit section and FAQ’s
9.5% calculation tool – Excel from SHRM.org
- 8962 Premium Tax Credit APTC Form attaches to Form 1040
- Affordable Employer Health Coverage? Employee ONLY 9.86% Family Glitch
- Age 65 – Can you get Tax Credits Subsidies Covered CA?
- Premium Subsidy to 600% FPL + Mandate Penalty?
- Mandate Penalty California – MEC – QHP – 5000 A
- 10 Reasons that you need Health Insurance
- Employer Mandate for Health Insurance ACA 4980 h
- Health Sharing Ministries – Not Protected by Insurance Guarantees
- Lawfully Present – Public Charge – Immigration Status
- Mandate Penalty California – MEC – QHP – 5000 A
- Subsidies Upheld – King v Burwell
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