Q&A: My employer only pays for my coverage, can I buy individual policies for my children instead?

Question

My company allows coverage for my whole family, but only covers a portion of the premium for me. They don’t pay any portion of the premium if I add dependents. If I add my kids, I have to have the full amount of their premium deducted from my paycheck. Can I buy individual policies for my children instead? Will they qualify for premium assistance?

Answer

Buying an individual plan during Open Enrollment or during another qualifying event is always an option. But when determining whether they can qualify for premium assistance, the answer is a little complicated.

First, though let me say that there is no requirement for an employer to cover a portion of your dependent’s coverage. But that being said many do anyway, but if they do it’s a courtesy on their part, not a requirement.

“The Family Glitch”

There’s an inherent problem with how premium assistance through the exchanges (included Covered California) work. One of them is known as “The Family Glitch.” The name is a bit of a misnomer, as it was identified and reviewed before the ACA was put into effect. Basically, you and members of your family can get premium assistance through Covered California if, and only if, the employee’s portion of cost is greater than 9.59% of your house income.

Did you notice the problem there?

It only looks at the employees cost. The cost of adding a spouse and/or dependents isn’t figured into the equation. So if the employees portion of the cost is less than 9.59% of the household income, the coverage for the whole family is considered affordable also, regardless of how much it costs.

So, in answer to the question; yes. You can buy an individual plan for your family. But you can’t get premium assistance unless the cost is greater than 9.59% of the household income for the employee, or the health plan being offered isn’t a Qualified Health Plan. And the possibility of those two events are pretty unlikely.

Other Options

There aren’t many other options, to be perfectly honest. But there are some other ways of getting healthcare coverage for your family that might not be as expensive as you think. Contact me and I’ll be happy to go over your options after learning a bit more of your individual situation.

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