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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.

Employer Coverage Over 9.5%?

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Question: How do I go to Covered Ca if my share of employer sponsored insurance is greater than 9.5% and receive the advance tax credits?

Answer: Complete a Covered California application online before April 15th. When you get to the Health Care Information section and this question, "Does this person have or has this person been offered affordable minimum standard value health insurance for 2014?", answer "None of the Above".


April 15th is the final day to start a new application and enroll… with assistance through a Certified Insurance Agent. Open Enrollment is NOT quite over. Regarding employer coverage: there is more than just the rule requirement of the lowest cost employer plan needing to be under 9.5% of the employee’s income to meet the ‘minimum value’ requirement: there is also the ‘Minimum Standard’ requirement which must be met, where the included benefits of the employer health insurance plan must meet ‘minimum essential benefit coverage.’

Minimum Essential Benefits: you know, like having Pediatric Dental and Pediatric Vision; benefits which most to all 2013 plan-year health plans do NOT have.

That would mean any employee on a current 2013 plan-year group plan, which is benefit-constructed without all ACA-required Minimum Essential Benefits (therefore does not meet the ‘minimum standard’), CAN go to the State Health Benefit Marketplace (Covered California) to acquire a tax subsidy, subject to total household MAGI income eligibility.

Problem is, however, mid-year 2014 when the employer switches over to new ACA-compliant 2014 plan-year health plans (ACA-compliant meaning meets ‘affordability’ and ‘minimum standard’ requirements), then the employee MUST take the employer’s health plan, which WILL meet the under 9.5% affordability threshold.

Yes Max. That is an important point. But I was just making sure that people know the formula for businesses is different than the formula for individuals. This is one of the many confusing aspects of the law.

Actually, unless there is some other “qualifying life event”, March 31 was the deadline to submit an application. Open enrollment is over. This should have been done by then. Determining today that the premium for employer-sponsored coverage exceeds 9.5% of income is not a life event.

This probably needs a little more clarification. If am employees out of pocket cost for “self only coverage” is less than 9.5% of your salary, then you are deemed to have “affordable coverage” regardless of how much it costs to insure the rest of your family. This will be a major issue at tax time next year because people think the formula pertains to the entire cost of coverage for their entire family when it does not. It was supposed to, but there are complications for the employer to determine how to ascertain the “household income” for employees. As a fix, it was determined that the formula for affordable as it pertains to employees would be calculated on “self only” coverage using only the employees income. In almost all cases, if the employer is providing any benefit at all, it will be applied to the employees self only coverage making the plan affordable and denying people the ability to qualify for a subsidy.

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