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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.

Affordable But Skinny

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Question: If I understand the Affordable Care Act correctly, if an employer offers a low-benefit, or “skinny”, healthcare plan, where the employee’s premium would be less than the 9.5% cap of AGI, then if I were to choose to go to the exchange, I would NOT be eligible for subsidies because my employer offered a plan, even though it was very poor. Is this a correct reading of the law? Would this be true even if the plan was better than a “skinny” plan, but worse than what I could get through the exchange — that is, I would not be eligible for premium subsidies? If so, it sounds like it would be better for an employer not to offer any plan, or that getting a new job is an imperative under such circumstances.

Answer: You raise several questions interesting issues. (1) Yes. If you are offered affordable employer-sponsored coverage (employee only premium cost is less that 9.5% of income), you will not be eligible for a subsidy regardless of how poor the coverage. (2) But employer-sponsored health insurance will eventually match the Exchange minimum coverage requirements, and (3) there will be some situations when it will be a win-win for both employees and employers not to have a group health plan, for example a small group (less than 50 employees) with a majority of low-income employees.

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