The Affordability “Glitch”
The talk in insurance circles these days is all about the affordability “glitch”. If an employee is offered affordable group coverage by his employer, neither the employee or his dependents will be eligible for a subsidy in Covered California. Coverage is considered affordable if the plan covers at least 60% of healthcare expenses AND if what the employer charges the employee for “employee only” coverage does not exceed 9.5% of the employee’s income. So coverage is considered affordable even if the employer contributes nothing toward the cost of dependent coverage. The glitch is that an employee may not be able to afford to add his dependents to the group plan, yet the dependents won’t qualify for a subsidy on the state exchange because the employee has been offered affordable coverage. We’re keeping an eye on this one and will let you know if the Federal government takes any action.