My mother currently does not have health insurance. My father’s employer offers insurance for spouses but it is to expensive for their income. Combined they make around $42,000/yearly, my father pays a $27 premium and it would cost $678 to add my mother onto his employers plan. Is there a way to get covered under Obamacare or do they fall into the family affordability glitch?
If an employer offers self-only coverage for the employee that is less than 9.66% of the families income then the employee and the family will not be eligible for cost assistance on the marketplace, but still have options for coverage.
The Family Affordability Glitch frustrated millions of working families in the US. It's also just plain confusing because "affordability" is defined differently for employers than it is for individuals and families.
The Employer Mandate, essentially, requires employers to offer "affordable" coverage to all/most of their full time employees or pay a fine. If the coverage they offer doesn't meet that criteria, then the employee and their family could get cost assistance for coverage depending on their income if they shop in the marketplaces or healthcare.gov. For the employer that means the self-only coverage for the employee only must be less than 9.66% (for 2017) of the family's income.
So with your parents as the example:
$27 x 12 = $324 Annual Premium
$324/$42,000 x 100 = .77% of family's income
So your father's employer is offering "affordable" coverage under the Employer Mandate. If it had been over 9.66% for only your father's coverage, than he and his family would be eligible for cost assistance on the marketplace for purchasing private insurance.
This is essentially the glitch. There is NO consideration for the cost of family coverage with regards to gaining access to the marketplace cost assistance for health insurance. That doesn't mean that you don't have options for getting coverage or at least avoiding the fee for not having insurance.
The Individual Mandate does not require employees or their families to accept the coverage that is offered by an employer. It only requires that you have minimal essential coverage or pay a fee from your taxes, but only if what you are offered is "affordable" for you. If the least expensive plan for self-only coverage offered from the employer is more than 8.13% (for 2017) of the family's income than the employee and, by extension, their family can apply for an exemption. If the least expensive plan for the family is more than 8.13% of family income than the family members are exempt.
So again, with your parents as the example:
Self-only coverage for your dad is .77% of income, thus, he would not be eligible for an exemption based on unaffordability. Things look a little differently when the family plan is in play.
$678 x 12 = $8,136 Annual Premiums
$8,136/$42,000 x 100 = 19.3% of family's income
1. Your mother can apply for an exemption from owing the fee or having minimal essential coverage through Healthcare.gov. While this doesn't solve the problem of getting her health insurance coverage, she would not owe the fee. It also opens her up to options not available to others, like a catastrophic plan paired with an Health Savings Accounts (HSA). While the high deductibles make these seem like expensive non-coverage at first glance, catastrophic coverage often has much lower annual costs even for those who need regular medical care because the premiums are so much lower. The money saved because of lower premiums can immediately be used to cover out-of-pocket expenses (tax-free if using an HSA). Despite being responsible for early out-of-pocket expenses, those with catastrophic plans also get the prices negotiated by the insurer. They are a good for people under 30 and those who have an exemption from minimal essential coverage.
2. She can also choose to shop for minimal essential coverage for herself outside the marketplace, as no one is required to take the coverage offered by the employer. Some have found more affordable options for coverage this way even though they weren't eligible for cost assistance through the marketplace.