On Employer plan- Eligible for health care subsidy?

[bizlady]

We are retired, still in our mid-late 50's, and because we are not drawing on SS or IRA's yet, fall easily under the 400% FPL income guidelines for healthcare subsidies.

We have "grandfathered status" health insurance coverage through DH former employer. Premiums far exceed the 9.5% expense of income floor in the new legislation. Our only income now is his pension, which just barely covers health premiums, withdrawals from regular savings, and interest and dividends.

What we are unable to determine at this time, is will we or will we not be eligible for healthcare subsidies in 2014? If so, will we have a choice of keeping his plan or switching? It is confusing because when I read about this, it appears those with reasonable employer plans are not eligible in 2014.

 

[Which Roger]

I don't know the answer, but I have been wondering the exact same thing. When I pull the plug, I will be in the same situation. I will be able get insurance from my employer if I pay the full premium, which will be a very high percentage of my income.

I guess the question comes down to whether the law says:

A: "you are not eligible for the subsidies/exchanges if you are covered by an employer's/former employer's plan" or,

B: "you are not eligible for the subsidies/exchanges if you are able to obtain coverage thru your employer/former employer".

 

[bizlady]

Thanks to a link posted on another thread, I think I found my answer (which is yes).

http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7962-02.pdf

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Who is eligible for premium tax credits?
[FONT=DIN,DIN][FONT=DIN,DIN]Citizens and legal residents in families with incomes between 100% and 400% of poverty who purchase coverage through a health insurance exchange[/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]1 [/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]are eligible for a tax credit to reduce the cost of coverage. People eligible for public coverage are not eligible for premium assistance in exchanges. In states without expanded Medicaid coverage, people with incomes less than 100% of poverty will not be eligible for exchange subsidies, while those with incomes at or above poverty will be. People offered coverage through an employer are also not eligible for premium tax credits unless the employer plan does not have an actuarial value of at least 60%[/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]2 [/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]or unless the person’s share of the premium for employer-sponsored insurance exceeds 9.5% of income. People who meet these thresholds for unaffordable employer-sponsored insurance are eligible to enroll in a health insurance exchange and may receive tax credits to reduce the cost of coverage purchased through the exchange.
[/FONT][/FONT]What is the amount of the tax credit provided to people?
[FONT=DIN,DIN][FONT=DIN,DIN]The amount of the tax credit that a person can receive is based on the premium for the second lowest cost silver plan[/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]3 [/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]in the exchange and area where the person is eligible to purchase coverage. A silver plan is a plan that provides the essential benefits[/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]4 [/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]and has an actuarial value of 70%. (In PPACA, a 70% actuarial value means that on average the plan pays 70% of the cost of covered benefits for a standard population of enrollees.) The amount of the tax credit varies with income such that the premium that the premium a person would have to pay for the second lowest cost silver plan would not exceed a specified percentage of their income (adjusted for family size), as follows:
[/FONT][/FONT][FONT=DIN,DIN][FONT=DIN,DIN]Income Level [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]

Premium as a Percent of Income​

[/FONT]​

[/FONT]​

[FONT=DIN,DIN][FONT=DIN,DIN]Up to 133% FPL [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]2% of income [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]133-150% FPL [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]3 – 4% of income [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]150-200% FPL [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]4 – 6.3% of income [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]200-250% FPL [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]6.3 – 8.05% of income [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]250-300% FPL [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]8.05 – 9.5% of income [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]300-400% FPL [/FONT][/FONT]
[FONT=DIN,DIN][FONT=DIN,DIN]9.5% of income [/FONT][/FONT]

 

[MichaelB]

If your cost for the employer provided insurance is greater than 9.5% of your MAGI and your income is less than 4x the FPL you should be eligible to use the state exchange and qualify for premium assistance even if the retiree policy continues. See this flowchart http://www.naic.org/documents/committees_b_consumer_information_130319_flow_chart.pdf

 

[bizlady]

This too is helpful, and provides another twist (clarification).

It suggests a path based on the premium for ONE person exceeding 9.5% of income.....

 

[Which Roger]

If your cost for the employer provided insurance is greater than 9.5% of your MAGI and your income is less than 4x the FPL you should be eligible to use the state exchange and qualify for premium assistance even if the retiree policy continues. See this flowchart http://www.naic.org/documents/committees_b_consumer_information_130319_flow_chart.pdf

Thanks for the flow chart! The flow chart shows that neither whether an ER has coverage from a former employer, nor the cost of the coverage, has any impact on eligibility for the exchange/tax breaks. It has a box that asks "are you employed with employer plan available?" If you take the NO branch (as all ERs would, since they're not employed), there is no path that will take you to the "> 9.5%" test. Of course another possibility is that the creators of the flow chart did not consider the ER case with former-employer coverage, so maybe the 9.5% test really does apply.