If you’re offered health benefits through your employer but are exploring the Affordable Care Act (ACA) Marketplace for coverage, you’re not alone. Many people wonder whether they can qualify for ACA plans or subsidies when they already have access to employer-sponsored health insurance. Here’s what you need to know about your options and how ACA eligibility works when your employer offers coverage.
ACA Marketplace Eligibility with Employer Health Coverage
Even if your employer offers health insurance, you can still apply for coverage through the ACA Marketplace. However, whether or not you qualify for subsidies—which can lower your premium costs—depends on two key factors: the affordability of your employer’s plan and whether it meets the minimum value standard.
Affordability Test
To qualify for subsidies through the Marketplace, your employer’s health plan must be considered unaffordable. A plan is deemed unaffordable if the cost of coverage for you (not including your family) is more than 9.12% of your household income (as of 2023). If this is the case, you could qualify for financial help in the form of premium subsidies.
Minimum Value Standard
In addition to affordability, your employer’s plan must also meet the minimum value standard. This means the plan must cover at least 60% of total healthcare costs and include substantial coverage for doctor visits, hospital stays, and essential health services. If your employer’s plan does not meet these criteria, you may qualify for Marketplace subsidies, even if the plan is technically affordable.
What Are Your Options?
- If Your Employer’s Plan Is Unaffordable: If your employer’s health plan costs more than 9.12% of your household income for your coverage, it is considered unaffordable. In this case, you can apply for an ACA Marketplace plan and may be eligible for subsidies to lower your premium costs.
- If Your Employer’s Plan Meets the Requirements: If your employer’s health plan is both affordable and meets the minimum value standard, you can still purchase coverage through the ACA Marketplace. However, you won’t qualify for any subsidies, meaning you would need to pay the full premium cost of the Marketplace plan. In this situation, most people choose to stay with their employer-sponsored plan.
- When Declining Employer Coverage: If you choose to decline your employer’s coverage and apply for an ACA plan, but your employer’s plan is deemed affordable and meets the minimum value standard, you will not be eligible for subsidies. This means you would need to pay full price for your ACA plan. It’s important to carefully compare costs and benefits before making this decision.
Rules and Regulations to Keep in Mind
- Subsidy Eligibility: To qualify for subsidies through the ACA Marketplace, your employer’s plan must either be unaffordable or not meet the minimum value standard. If your employer’s plan meets these requirements, you will not be eligible for financial assistance through the ACA.
- Employer Penalties: If you decline an affordable, minimum value plan offered by your employer, you won’t be penalized, but you won’t receive subsidies on the ACA Marketplace either.
What’s the Best Option for You?
Whether to stick with your employer’s plan or explore the ACA Marketplace depends on your specific circumstances, including your household income, the cost of your employer’s plan, and how it compares to Marketplace options. The key is to evaluate the affordability and coverage of each option to determine what works best for you and your family.
Need Help Navigating Your ACA Options?
If you’re unsure about whether to stay with your employer’s plan or switch to the ACA Marketplace, we’re here to help! At Optimized Health Plans, we can guide you through the process, compare your options, and help you determine the best route for your health coverage.