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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President Obama signed into law the Affordable Care Act (ACA)
We are hearing that this law will insure more Americans and drive insurance costs down. Of course, I’m pretty skeptical it will drive costs down.