The Exchange/Marketplace Open Enrollment period is upon us. We wanted to send out a few answers to frequently asked questions that some of our clients have been asking us. We will send them out over a period of time so we don’t flood your inbox with information.
If my employee applies for an individual plan on the Exchange, will they qualify for a subsidy?
If you offer your employee affordable coverage that meets minimum value standards (more on that below), the employee will not qualify for a subsidy, regardless of their level of income. However, they may qualify for a subsidy for their family members.
The amount an individual can save depends on their family size and how much money their family earns. In general, if their income falls within the following ranges they’ll qualify to save money on their premiums in 2014. The lower their income within these ranges, the more they’ll save. (The amounts below are based on 2013 numbers and are likely to be slightly higher in 2014.)
- $11,490 to $45,960 for individuals
- $15,510 to $62,040 for a family of 2
- $19,530 to $78,120 for a family of 3
- $23,550 to $94,200 for a family of 4
- $27,570 to $110,280 for a family of 5
- $31,590 to $126,360 for a family of 6
- $35,610 to $142,440 for a family of 7
- $39,630 to $158,520 for a family of 8
To officially find out if they qualify for a subsidy, they will need to complete an application through the marketplace/exchange.
If your plan is considered to have an out of pocket maximum of $6,350 annually or less, and you are charging your employee no more than 9.5% of their W2 income for employee only coverage, then most likely your plan is considered affordable coverage and meets minimum value standards.
NOTE- IF AN EMPLOYEE OBTAINS A SUBSIDY AND IS NOT ENTITLED TO IS – THE GOVERNMENT WILL EXPECT IMMEDIATE REPAYMENT