Families with Unaffordable Job-Based Health Insurance May Be Eligible for Marketplace Plans

Companies that provide health insurance for their workers may only offer employee-only coverage options that do not include their spouse and dependents. When employers do offer family coverage, the cost of premiums can be expensive.

The federal government created the Affordable Care Act in 2010 as a solution to unaffordable health insurance. People who want health coverage can enroll in plans on the Healthcare Marketplace during a once-a-year enrollment period. In addition, depending on income, some people may be eligible for premium tax credits which lower monthly premium costs.

However, because of a flaw in a federal rule, if a worker has an employee-only health insurance plan that’s deemed affordable under federal guidelines, their family members are not eligible for tax credit help when buying a plan on the Healthcare Marketplace. These affordability guidelines did not account for the additional cost burden of adding a family plan to the employee's coverage.

Recently, the federal government amended the rule. Now, spouses and dependents of a worker with an employee-only insurance plan may be eligible for a premium tax credit. This change took effect on December 12, 2022.

Under the new rule, if the cost of an employer-sponsored health insurance premium on the least expensive employee and family plan is more than the 2023 affordability threshold — 9.12% of the household income — spouses and dependents could qualify for premium tax credits on a Marketplace plan.

Determining if the employer-sponsored insurance exceeds the affordability threshold requires workers to calculate how much they would pay for the least expensive employee-only and family plan that meets the standard of minimum coverage. It also requires factoring in the employee’s expected yearly income for 2023.

The employer’s plan meets standard coverage requirements if it pays at least 60% of the total cost of allowed medical services and offers sufficient coverage of physician and inpatient hospital services.

If the employer’s plan does not meet minimum value requirements, the worker and their family may already be eligible for a premium tax credit on the Marketplace.

Individuals, employees, and families have until January 15, 2023, to enroll in a Health Insurance Marketplace plan. After that date, obtaining coverage can only occur if the person qualifies for the Special Enrollment Period.

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