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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.

Subsidies in the SHOP Exchange?

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Question: Are empoyees covered by a group plan on the exchange eligible for subsidies?

Answer: No. Premium subsidies will only be available in the Covered California individual marketplace. This is an interesting question because it presents a dilemma for many small-business owners and their employees. Almost all small businesses will have some employees who will qualify for premium-subsidies. The way the ACA law reads, those employees cannot enroll in the Covered California individual marketplace and use their subsidies if their employer offers a group plan. This appears to force the employer into an all or nothing choice - offer a group plan to all eligible employees or don’t offer one at all.

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This will present an all or nothing proposition to employers. In some cases, employers will be able to save a lot of money by sending their employees to the exchange instead of providing health benefits themselves. The coverage offered by the state will be high quality and affordable!

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