What the Government Considers “Affordable”
For employees receiving their benefits from an employer.
If the employee portion of the health insurance the employer provides costs more than 9.5% of the employee’s income, and it doesn’t cover at least 60% (Minimum Value) of the employees medical expenses, this is considered to be “unaffordable”. If your insurance is “unaffordable” you are then permitted to see if you qualify for a Subsidy (Advanced Premium Tax Credit). If the employee’s insurance from their employer is affordable, then the employee is NOT eligible for a tax subsidy.
If you DO NOT receive health insurance from your employer.
As individuals or families, if your portion of the health insurance premium costs more than 8% of your household income, it is considered “unaffordable”, which means you don’t have to buy a medical plan “excludable.”
For individuals and families that go to the exchange to buy health insurance, IF the insurance is greater than 8% of your Modified Adjusted Gross Income (MAGI) it is considered “unaffordable” and you are not required to buy insurance. MOST Americans will find they will qualify for either Medicaid or a Subsidized plan that makes insurance “affordable.”
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Things Potentially NOT Covered By Your Health Insurance
To be fair, in recent years, health insurance companies have made strides towards transparency. If you have an ACA-compliant plan, there are many services that your health insurance is legally required to cover, taking some of the guesswork out of budgeting for health expenses.
Medical Loss Ratio
This Medical Loss Ratio states that when a family or individual buys a medical plan, 80% of every dollar collected and paid to an insurance company MUST pay medical claims/research. So that leaves the insurance company to pay ALL of their expenses with the remaining 20%. .20 cents on the dollar for their employees, buildings, broker costs, etc.
Why Does Health Insurance Have an Open Enrollment?
The Affordable Care Act / Obamacare, put specific enrollment periods in place to prevent people from only enrolling in health insurance when they were sick or needed surgery.