Under the Affordable Care Act, a person can pay up to 9.5% of his income for his health insurance. Are there situations where a person has to spend more than that to get coverage that qualifies?
Dear Budget Betty,
Yes, there are.
First, let’s explain that the 9.5% maximum applies to you if your employer offers you health insurance. Your employer can “charge” you up to 9.5% of your modified adjusted gross income to cover yourself (single coverage).
If your employer charges more than that, your plan is considered unaffordable and you can go to the exchange to get subsidies to purchase a plan. Otherwise, you would not qualify for any subsidies from the exchange.
The 9.5% cap does not apply to you if you earn more than 400% of Federal Poverty. You can pay any amount your employer chooses if you are in this high-earner category.
The 9.5% cap also does not apply to the cost of covering your family. Some have called this the “family loophole” and have urged lawmakers to change the rule. Given the political environment, I’m not sure I would bet on this change happening.