Health Care

August 18, 2013

Insurance through employer almost certainly cheaper than through exchange

People covered under most employer group insurance policies aren’t eligible for some of the Affordable Care Act cost-saving benefits – mainly tax credits.

If you’re hearing about the new Health Insurance Marketplace and wondering if it might be a better deal than your employer’s insurance, the answer is: It probably isn’t.

People covered under most employer group insurance policies aren’t eligible for some of the Affordable Care Act cost-saving benefits – mainly tax credits. Without those tax credits, it’s extremely unlikely you’ll find a better deal on the insurance marketplace exchange.

There are exceptions: You could be eligible for the tax credits if your employer’s plan doesn’t meet the “affordable coverage” and “minimum value” definitions.

If your personal cost for the annual premium through your employer’s policy is less than 9.5 percent of your annual wages, that policy is deemed affordable. That means if you make $50,000, your health insurance (medical only, not dental or eye) premiums can add up to $4,250 and be considered affordable. If you’re paid every two weeks, that comes to about $177 per paycheck.

Also, if your employer’s plan doesn’t pay at least 60 percent of the total medical cost of medical services, it’s not deemed minimum coverage.

Companies with more than 50 employees face fines if they fail to meet those standards, so most will work hard to ensure they do.

People with insurance through their employers still might want to punch their personal income numbers into the online tool after Oct. 1 just to make sure there’s not a better deal on the exchange. But don’t count on finding savings.

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