Obamacare May Require More Creative Savings

Controversy is swirling around the Affordable Care Act as the market exchanges open with the beginning of next month: Will it be more or less expensive? Will it work?

But one man is looking at a quirk in the system he thinks many may benefit from.

Jonathon Wu, co-founder of the price comparison site ValuePenguin.com, said that for some people, it will be more economical to have an employer cease offering health insurance subsidies for them and their families. In this case, the entire family is then free to buy insurance with government subsidies on the Obamacare state health exchanges.

“For a lot of people, that may be a better deal,” Wu said.

Under the ACA, a worker whose employer offers company-subsidized health insurance that costs the worker less than or equal to 9.5 percent of household income is considered to be receiving affordable coverage.

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The availability of this coverage makes employees ineligible for the state exchanges using government subsidies. However, the affordability test considers only the cost to the worker of buying insurance from the company’s plan, not the cost of insuring the entire family.

Therefore, even if the cost of purchasing coverage for a worker’s entire family exceeds 9.5 percent of the household income, the family cannot potentially save money by buying government-subsidized insurance on the state health exchange.

The potential financial hit or benefit that families may see is becoming more apparent with the approach of Oct 1, the date when all the federal and state-run Obamacare exchanges are scheduled to begin enrolling people in plans.

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There are always many strategies to purchasing health insurance in order for employers and employees to save money. If you have any questions about how the Affordable Care Act could help or hurt your plan purchasing, please contact Tom Quigley at tquigley@claimlinx.com. Look for his book How to Beat Obamacare to be released soon.  Also, please view our Health Care Reform guide here.

You may also be interested in reading some of the options Jonathon Wu explains in the article by Dan Mangan this information was taken from.

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