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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Are Subsidies Another Form of Social Welfare?

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Question: Is it not a fact that federal premium subsidies are another form of social welfare?

Answer: If you get health insurance from your employer, you’ve been receiving a generous public subsidy for years. The higher your income is, the larger your subsidy relative to your lower-income colleagues. That’s because the contributions your employer makes toward your group health insurance premium is a tax-deductible business expenses and non-taxable compensation to the employee even though it is a form of compensation. Estimates of the total dollar amount of that subsidy range between $200 billion and $300 billion a year, depending on what taxes are included in the analysis (only federal income taxes, or also payroll taxes and state income taxes). Estimates consistently show that high-income earners receive the bulk of that public subsidy.

1 Comment

Hello….so I was told since my husband has covered california we were on welfare..we pay 128.00 a month, have copays and pay for perscriptions…this person insists we are using the system..any info would help..

Thank you, Sarah bader

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