Monday, December 2, 2013
How much is too much when it comes to health care premiums for employer-based coverage? You and the federal government might disagree.
Second Opinion is a weekly Q-and-A series that answers questions from San Diegans on the Affordable Care Act. Ask yours here.
The Question: Am I eligible for health insurance subsidies through Covered California if my employer's coverage is too expensive?
Doug Blackwood and his wife live in Ocean Beach. He works in homeless services, and she works in a restaurant. They don't make a lot of money, but they have everything they need and have a great deal on rent in a neighborhood they love. At least right now.
Speak City Heights is a media collaborative aimed at amplifying the voices of residents in one of San Diego’s most diverse neighborhoods. (Read more)
Blackwood's insurance premium and the couple's rent will both go up 15 percent next year. And an initial estimate for his wife on Covered California put her premium at more than $600 month.
They're hoping the estimate is wrong, and that an Obamacare subsidy will help offset their added costs.
"We work hard. We don't mind working hard. But we want the system to be equitable," Blackwood said. "How can we make this work so that we're able to maintain our house?"
Here's Blackwood's question:
"My spouse is a hard-working woman that makes $18,000 to $20,000 a year. Her health care costs are $2,400 a year through her company. Is there a subsidy available to help her?"
The Takeaway: You'll get subsidies if coverage through your work is unaffordable, but you and the government could disagree on how much is too much.
Anyone can shop on the Covered California insurance exchange, but not everyone is going to qualify for subsidies. If you have an affordable option through your job, you won't get financial assistance.
The Affordable Care Act says a plan is affordable if the premiums cost within 9.5 percent of your income and the insurer pays at least 60 percent toward covered health services.
Blackwood's wife will get a subsidy because the $2,280 she pays annually for benefits through her employer surpasses that 9.5 percent threshold. The subsidy could bring her monthly payment down to a dollar.
But this case is unique. Though Blackwood calls her his wife, they're not married and don't file taxes together. If they did, Covered California would use the entire household income. Together, they make about $45,000 and pay $320 in combined premiums, which is affordable by the government's standards.
The Orders: Appeal Covered California's decision.
Because Blackwood's wife has already completed the application process, she'll need to send an appeal request through the exchange's website or call 1-800-300-1506.
For folks just starting the process, remember that the information you tell the exchange should match what you tell the IRS each year. If you file taxes with someone else, use your household income. If you file as an individual, use only your income.
Check out last week's Second Opinion: What does Obamacare mean for my paycheck?