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Marketplace Subsidies and Employer Sponsored Health Insurance

Are subsidies on the marketplace available for employees who have insurance from their jobs?

Many people will either look to their job or the Marketplace for health insurance. Their employer might organize a group plan and help pay for premiums, making the cost more affordable for the employees. If that isn’t an option, people can go to the marketplace and qualify for a subsidy. These subsidies are what makes the marketplace an affordable option to get major medical health insurance. Now because of some recent changes, the “family glitch” which previously caused many Americans to go without a subsidy and therefore without health insurance, has been eliminated. There are an estimated 600,000 to as many as 2.3 million Americans that will now be able to qualify for a subsidy on the Marketplace. In addition, 80,000 to 600,000 previously uninsured people could become eligible for a subsidy, allowing the financial help needed to afford health insurance.

What are Subsidies?

Subsidies on the health insurance Marketplace help by reducing your monthly premiums. Some of these subsidies can also lower your deductibles and copays. The amount of subsidies you qualify for depends on your household size, household income and how many people are enrolling in health insurance. Some people may see their monthly premiums reduced by as little as 1% or as much as 100%, it just depends on their situation. If someone has other health insurance options that are of a high enough quality, like many health insurance plans offered by an employer, then this usually means that they would not qualify for a subsidy.

If you would like to see if you qualify for a subsidy, give us a call at 615-528-1227 and we would love to help.

What is the Family Glitch?

The Family Glitch happens when it is too expensive for a spouse and/or dependent to be added to an employee’s insurance. Those who are eligible for job based health insurance are usually not able to qualify for a subsidy on the marketplace. People in this situation were often left without health insurance. There was a rule, however, that was supposed to aid in this situation. The rule sought to identify whether or not the insurance that the employer offered was unaffordable. If it was considered unaffordable, then you could qualify for a subsidy from the marketplace. The affordability of job based health insurance was calculated like this: if the cost of insurance for just the employee was more than 9.61% of the total household income, then it was considered unaffordable and that employee and their family could get a subsidy from the marketplace, thus giving them an affordable option for health insurance. The issue here is that the employee would have at least half of their total premium covered by their employer, making it usually below 9.61% of the household income. The cost to add a spouse or a dependent can sometimes be twice as much as it is for the employee, since the employer is not required to contribute to their premiums. This made it more common for a spouse or dependent’s premium to exceed 9.61% of the household income. And the issue was that the cost of insurance to add a spouse or dependent was not taken into consideration, just the cost for the employee. And so many Americans in this situation went without health insurance because it was too expensive to be added to the employee’s insurance and, without a subsidy, it was too expensive to go to the marketplace. This was the Family Glitch.

The Fix to the Glitch?

The fix to the glitch is simple. Consider the cost of insurance for the spouse and or dependents of an employee. In the case where it is affordable for the employee, they would not need to go to the marketplace, but if it was too expensive for their spouse or dependents, then they would be able to receive a subsidy from the marketplace. This is exactly what was allowed in the new rule for 2023. In addition, the affordability threshold of 9.61% was dropped to 9.12%. The cost for insurance from an employee’s job for each person who wanted to apply would now need to exceed 9.12% of the household’s income to be considered unaffordable. As we said before, it’s common that the employee’s cost would be below the affordability threshold, while many spouses and dependents would exceed it. Thanks to the new rule, those spouses and dependents can now go to the marketplace and qualify for a subsidy, allowing them an affordable option for health insurance that they otherwise did not have.

Best way to get assistance

Hi there! My name is Josiah and we at Tennessee Health Insurance are independent agents which means we’re not trying to sell you one particular product. We try our best to understand your situation and present the best solutions to you, providing you with whatever you need to make an educated decision for you or your family. Our assistance does not cost you anything, so take advantage of the help we can offer. Schedule a meeting with us through this link (click here!) or give us a call at 615-528-1227


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