Navigating health insurance can be complex, especially when you have coverage through your employer. You might be wondering if you could switch to a qualified health plan and potentially receive financial assistance, even with your current job-based coverage. The key question is whether your employer’s health plan is considered both adequate and affordable. If it is, you might not qualify for those extra financial benefits through programs like Vermont Health Connect (VHC).
Let’s break down how you can determine if your employer’s health plan meets these criteria. You’ll need to gather two crucial pieces of information about your current health plan:
- Adequacy of Coverage: Does your employer’s plan meet the federal minimum value standard? This standard ensures the plan offers a certain level of benefits. Your employer should be able to provide you with this information.
- Affordability of the Plan: Affordability is calculated based on the percentage of your household income required to pay for the lowest-cost plan offered by your employer. If your job-based plan is deemed affordable based on this percentage, you generally won’t be eligible for financial help on the health insurance marketplace. However, if the cost exceeds a certain affordability threshold, you may qualify for financial assistance.
How to Determine if Your Employer Health Coverage is Affordable
To calculate the affordability of your employer-sponsored health plan, the most effective approach is to utilize the Employer Coverage Tool.
First, request your employer to complete the Employer Coverage Tool form for the specific plan year you’re evaluating. This form contains necessary details about your employer’s health plan.
Once you have the completed form, you can use this information to fill out the online Affordable Employer Coverage Tool. This online tool will analyze the data and tell you definitively whether your job-based health plan is considered affordable under federal guidelines. For your reference, you can also review a list of affordability rates by year to understand how the federal affordability standard has changed over time. The federal affordability standard is updated annually.
Affordable Employer Coverage Tool
Alternatively, if you prefer a more traditional approach, you can mail the completed Employer Coverage Tool along with your application for health coverage. The relevant authorities can then assess your plan’s affordability on your behalf.
Understanding Affordability for Family Health Plans
Starting in 2023, there have been important changes regarding affordability calculations, particularly for family health plans. Families may now be eligible for new savings opportunities, even if they weren’t previously qualified. It’s important to understand that there are now two distinct measures for employer plan affordability:
- Employee Affordability: This calculation considers your share of the premium for the lowest-cost employee-only plan offered by your employer.
- Family Member Affordability: This measure focuses on your share of the premium for the lowest-cost plan that covers all family members who are offered coverage through your employer.
You can apply for financial assistance to help pay for a Vermont Health Connect plan if your employer-sponsored plan is deemed unaffordable. You can do this either through a Special Enrollment Period if you are transitioning from your job-based insurance, or during the next open enrollment period.
