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If I have insurance through my employer, can my spouse get coverage through the exchange?

If I have insurance through my employer, can my spouse get coverage through the exchange?

Q. I have insurance, with a small fee, through my employer.  However, my husband is unemployed and to cover him on my insurance is almost $500.  Can he get insurance through the marketplace even though he’s eligible to enroll in coverage through my company?

A.  Yes, but he cannot get a subsidy to help pay for health insurance in the marketplace.  If you have access to an employer-sponsored plan that is deemed affordable, you cannot get a subsidy to help pay for an individual policy instead.

The IRS has ruled that an employer plan is “affordable” if the cost for employee-only coverage (for the least-expensive plan available from the employer) does not exceed 9.61% of household income in 2022 (the Build Back Better Act would reduce this threshold to 8.5% of household income).  This is true regardless of the total amount that must be paid to cover dependents on the policy, and it was not affected by the American Rescue Plan’s extensive improvements to the subsidy structure in 2021.

And although the Build Back Better Act would reduce the affordability threshold, it would not change anything about the fact that the affordability determination is based on only the cost to cover the employee, without regard for the cost to add family members.

You mentioned that your coverage is provided for a small fee — as long as it’s not more than 9.61% of your household income (or 8.5%, if the Build Back Better Act is enacted), your husband would not be eligible for a marketplace subsidy on an individual plan. This is known as the family glitch, and there are several million Americans who are unable to access affordable health insurance because of it.

However, depending on his age and the type of coverage he wants, he might find that he can get an individual plan for less than $500, even without a subsidy. He can shop in the marketplace or off-exchange (directly through a health insurance carrier or a broker) and see what’s available in your state. If he doesn’t mind a relatively high deductible, a Bronze plan might be a good way to lower his premium costs. The average full-price premium for health plans sold in the exchanges nationwide was about $575/month in 2021, but that includes areas where premiums are more expensive than average, as well as plans at higher metal levels.

And average benchmark premiums have decreased for 2022, so he might have more affordable options. The open enrollment period for 2022 coverage continues through January 15, 2022 in most states, although some states have different deadlines.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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