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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.


Fair Share?

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Question: If you look at the income chart on CoveredCA, it looks like a household of 3 will qualify for a subsidy as long as their household income is under $78,120. But only one family member of the household needs coverage. According to the shop and compare tool, this family member does NOT qualify for a premium subsidy. If I recalculate and say that all three members of the family need coverage, then they do qualify for a subsidy. What gives?

Answer**: “Your fair share” of the premium is established as a percentage of your income. For a 3-person household with an income of $78,000, your fair share is 9.5% of income. That equates to about $620 per month. This number is a constant regardless of who is to be covered. If all three members of the household need coverage and the premium is $1120 per month, you’ll get a subsidy of $500 per month to cover the difference. If only 2 people need coverage, your fair share is still $620, and if the premium for 2 people is $720, you’ll get a subsidy of $100 to cover the difference. But if only one person needs coverage, your fair share is still $620, but the premium is only $300. So you pay the $300 without a subsidy.

1 Comment

The one element unstated above is that the premium tax credit is based against the cost of the SECOND LOWEST SILVER PLAN PREMIUM in the applicant’s region of CA. So you have to take the 9.5% of annual income value and subtract that amount from the annual silver plan premium, then divide by 12 to get the monthly APTC.

A CHAT Operator at Covered CA stated yesterday that if the premium is less than 8% of income it is considered “affordable”, which is misleading. What is true is that if the premium is more than 8% of income, the shared responsibility payment is waived if no health insurance was obtained.

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