What if Your Employer’s Health Insurance is Too Expensive?
Just the Essentials...
- Affordable ACA Marketplace qualified health insurance plans are required to cost less than 8.13 percent of a family’s annual income.
- Affordable employer-sponsored health insurance is required to cost no more than 9.66 percent of household income after an employer’s contribution.
- If you can’t afford your employer’s health insurance plan or a Marketplace plan, you still have options for adequate health insurance
Understanding the ACA Marketplace
Over the past few decades, demand for adequate, affordable health insurance in the face of rising healthcare costs and illness rates has increased. As demand for health insurance increases, the costs of premiums increase as well.
The Affordable Care Act (ACA) requires insurance providers to make health insurance plans available to all at affordable rates. Though the ACA has helped somewhat with reducing health insurance premiums, affordable health insurance still remains out of reach for a vast segment of the American population. This includes those who cannot afford to obtain health insurance through their employer.
If you’re unable to afford health insurance coverage through your employer, you may be able to get health insurance that works better for your budget. However, there are a few caveats to being able to get a Marketplace plan if you’re still gainfully employed. Let’s take a look at which options you may have if you cannot afford the health insurance offered by your employer.
It’s easy to find health insurance plans in your area that meet your needs and your budget! Enter your zip code into our free comparison tool below to find and compare available health insurance plans in your area.
What is the Affordability Threshold?
The ACA defines the threshold for affordability when it comes to health insurance plans. If your employer offers health insurance, premium rates are expected to meet a certain threshold to be defined as “affordable.” Affordable employer-sponsored health insurance must cost no more than 9.66 percent of your household income, not including your employer’s contribution.
If your employer’s health insurance costs more than 9.66 percent of your household income, you are eligible to use the Marketplace and get cost assistance for a qualified ACA Marketplace health insurance plan. If your employer’s health insurance costs less than 9.66 percent of your income, then you cannot use the Marketplace or get assistance.
Reform and Affordability Go Hand in Hand
Making health insurance more affordable for everyone is a key component of the ACA. Before the ACA was passed, it was next to impossible for certain segments of the American population to get affordable health insurance. Private health insurance providers essentially made their own rules regarding who could enroll in their plans and at what cost. This included employer-sponsored health insurance plans.
The ACA has clamped down on restrictions and price gouging in the insurance industry. For instance, you can no longer be denied insurance or charged exorbitant premiums because you have a pre-existing condition or chronic illness. Some providers may have add-ons available that can drive up the cost of your plan, but you cannot be charged a higher premium than anyone else simply because of a chronic condition.
To make health insurance more affordable to those who could not previously afford it, the government created the ACA Marketplace to sell qualified health insurance plans. Marketplace plans were designed to be perhaps the most affordable of all, as the law requires them to cost less than 8.13 percent of a family’s annual income. Tax credits were also put into place to help qualifying policyholders with the cost of their monthly premiums.
I’m Not Interested in a ACA Marketplace Plan - What Are My Alternatives?
If your employer’s plan doesn’t fall under the definition of “affordable coverage” for your budget, and you’re not interested in a Marketplace health insurance plan, you do have other options available. For example, Emergency Medicaid may be available to you in the instance of a major health crisis. Some private providers also offer low-cost, high-deductible plans that are meant to serve beneficiaries on a budget.
Still looking for affordable health insurance that meets your budget and needs? Enter your zip code into our free comparison tool below and start comparing quality health insurance plans in your area today!
Key Resources:
1: “Why Do Employers Pay for Health Care?”
2: “How Do I Know Which Employer Has the Best Health Insurance Benefits?”
3: “The Affordable Care Act: What Are Its Goals and Do We Need It?”
