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Affordability Test for Employee Coverage

This message is my attempt to figure out if I will qualify for a premium tax credit next year under Obamacare. 

Under Obamacare, there is an affordability test that requires that self-only coverage offered to employees cost less than 9.5% of their household income. Right now, self-only coverage is, for me, free through my employer. However, I also have coverage for my dependents through my employer, and that portion is not free. It covers my wife and daughter and takes up roughly between 20% and 30% of my household income. I feel that this amounts to some sort of perverse legal robbery. I have essentially no disposable income because I am paying more than $1,000/month for health insurance. My wife and daughter are perfectly healthy and have no chronic health issues. Yet my bank account is being drained to nothing so that I can have health insurance coverage that I almost never use. 

Yet, I can find nothing in the recently issued IRS regulations that would specify any sort of affordability test that applies to an employee's dependents. If my employer continues to offer me free self-only coverage in 2014 along with coverage for my dependents that essentially renders me a slave to the insurance companies, will I really not qualify for a premium tax credit?

Does anyone know if anything is going to be done about this?


  • Hi @parmstrong:  

    You are correct that the 9.5% test applies only to self coverage.  I think the ACA's intent is that you'll be able to keep your existing insurance for you and your family.  Or, in October, you can compare your existing plan to the ACA plans offered on your State's Exchange.  If one of the ACA plans offers comparable coverage for a savings, then you could potentially switch only your spouse and dependents to the ACA plan, keeping yourself on your employer's plan.
  • WcmWcm
    edited September 2013 Posts: 4
    In most cases if a family is eligible to be included on an employer's group insurance plan as dependents they will find that they will not qualify for the subsidy.
    Thanked by 1Bob_Moderator
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