If your employer offers you health coverage that is not considered adequate or affordable, then you are eligible to receive tax credits and cost-sharing reductions on Vermont Health Connect. But how do you know if your health coverage is considered adequate and affordable?
The first step is to gather information from your employer about 1) which health plans meet the minimum value standard (this determines whether the plan is “adequate”), and 2) how much you would be required to contribute for the lowest cost Single plan that meets this standard (this will help determine whether it’s “affordable”). An easy way to collect this information is by asking your employer to fill out the Employer Coverage Tool.
Once you have the relevant information, just use the calculations below to determine if your employer's offer meets the federal definition of "unaffordable." In short, is your required contribution for the lowest cost 2020 Single (self-only) plan more than 9.78% of your household's income? If so, you can decline your employer's coverage and apply for a health plan (and financial help to pay for it) through Vermont Health Connect on your own. If you know your plan meets the unaffordability definition, you can get an estimate of your financial help from the Plan Comparison Tool (just be sure to answer 'no' to question 2.2 in order to get this estimate).
Please note that if your employer is offering coverage through Vermont Health Connect, you should use the cost of the lowest cost bronze plan available to you.
Employer-sponsored Insurance Affordability Worksheet
1. Your required monthly contribution to purchase the lowest cost Single (self-only) plan: ______________________ (line 1)
2. Multiply "line 1" by 12 to get your required annual contribution: __________________________ (line 2)
3. Your estimated 2020 household income (include wages and tips, salary, self-employment income, interest and dividends received, alimony received, Social Security payments received, other income): _____________________ (line 3)
4. Divide line 2 by line 3 to determine your required contribution as a percent of your household income: _____________________ (line 4)
If line 4 is larger than .0978 (9.78%), your plan is considered unaffordable. Based on this information, you will likely qualify for financial help if you apply for coverage through Vermont Health Connect.
If line 4 is no more than .0978 (9.78%), your plan meets the federal definition of affordability. Based on this information, you will not qualify for financial help through Vermont's health insurance marketplace, Vermont Health Connect.
- For 2020 a health plan is 'affordable' if the cost of a Single plan is less than or equal to 9.78% of your household's Modified Adjusted Gross Income (MAGI).
- The lowest cost Single plan is used to calculate affordability, regardless of the plan you intend to buy.
- 'Your required contribution' refers to the amount you pay after your employer's contribution.
1. Jane's employer offers her several health plans. She would have to pay $198 per month to get the lowest cost Single plan.
2. Multiplying by 12, she would have to pay $2,376 per year.
3, Jane expects that her 2020 household income will be $24,000.
4. $2,376 / $24,000 = 9.90%, which is greater than 9.78%, so Jane's employer-sponsored insurance will be considered unaffordable. She can apply for coverage through Vermont Health Connect and may qualify for financial help to reduce the cost of coverage.