Like almost everything else having to do with health care reform, there are plenty of nuances and caveats. Trying to decipher them and choose the best health insurance plan for your situation "makes homeowners insurance seem really simple," says Brian Haile, senior vice president for health policy at the tax services company Jackson Hewitt.
Exchanges will be open to all, but ...
The exchanges are online health insurance marketplaces set up under the Affordable Care Act. In 34 states, the marketplaces operate through the federal government's HealthCare.gov website, while 16 states and the District of Columbia are running their own exchanges.
Even if your employer already offers health insurance, there's nothing to prevent you from shopping on your state's exchange. However, if you decide to leave your work-based plan and purchase coverage on the exchange, you "may not qualify for some of the benefits that the uninsured have," notes E. Denise Smith, a professor of health care management at Gardner-Webb University in Boiling Springs, N.C.
Here's the big hiccup: Unless your employer's coverage for an individual is considered unaffordable under the law (that is, if your share of the premiums costs more than 9.5 percent of your household income) or inadequate (picking up less than 60 percent of the cost of covered benefits), you aren't eligible for a government subsidy to help pay for your insurance. Subsidies are one of the things that can make plans on the new state exchanges appealing.
Subsidies in the form of tax credits are available even if you earn up to 400 percent of the federal poverty level, currently about $46,000 for an individual and $94,000 for a family of four. The subsidies vary based on income and the size of your family.
Trade in your employer plan?
And that brings us back to the central question: If you have employer health insurance, should you check out the Obamacare exchanges anyway? There are differing opinions.
"It would generally not benefit an employee to leave their employer-sponsored plan," Smith concludes, adding that your employer would be under no obligation to help pay for an exchange plan.
Haile says you may not be able to do better than your work-based coverage. "Look at how robust your employer plan is" and the benefits it provides, such as whether it includes dental and vision care, which are not part of the essential health benefits that must be offered with plans sold in the Obamacare exchanges, he says.
Still, if your employer-sponsored health insurance seems to eat up a big chunk of your budget, you might want to explore your options on the state exchange, Haile says.
Few workers have 'unaffordable' plans
Again, one of the key criteria of whether you'd qualify for subsidized insurance through your state's exchange is if your share of the premium for an individual health plan where you work would amount to more than 9.5 percent of your household income. Whether you take more expensive family coverage doesn't matter; the benchmark is what an individual policy would cost.
The rule means that someone earning $40,000 a year and paying $3,775 for individual coverage would not be eligible for a subsidy, says Brian Poger, CEO of Benefitter, a software company that's helping employers navigate their way through health care reform. That same worker paying even more for family coverage would still not be eligible because, again, the premium for an individual is less than $3,800 (or 9.5 percent of $40,000).
The 9.5 percent-of-income threshold is one that few workers would meet, according to one recent study. The ADP Research Institute found that only 8.6 percent of employees are required to pay premium contributions that would meet the Affordable Care Act's definition of "unaffordable."
How will you know whether your premiums and income put you in that group and make you a good candidate for an exchange plan? Right now, it's a little unclear.
"The answer is sort of a mish-mash," Haile says. Many of Obamacare's employer requirements were delayed until 2015, though companies were still supposed to provide notices by Oct. 1 telling workers whether their current coverage would be considered affordable. But the U.S. Labor Department says there's no fine or penalty for failing to provide the notices.
Exchange coverage for family members
Under those same delayed "employer mandate" provisions, companies with at least 50 full-time workers will be required to offer health insurance to their workers and the workers' dependent children in 2015. But coverage for workers' spouses will not be mandatory, notes Christine Barber, senior policy analyst at Community Catalyst, a health care advocacy group.
"If your spouse isn't covered by your employer's insurance and doesn't have insurance through his or her own employer, your spouse could shop for insurance on the exchange and potentially qualify for a subsidy," Barber says.
Others who might find it valuable to shop on the exchanges are working singles under the age of 30 who don't have health issues and would be able to purchase a catastrophic plan, Haile says.
Catastrophic plans available on the state exchanges will have low monthly premiums but high deductibles. According to Haile, they're not eligible for subsidies.
All workers at a particular company often pay the same rate for their employer health insurance, regardless of age or medical history, he says. Opting for an Obamacare catastrophic plan "could be cheaper if you're the young kid on the block," especially if your co-workers are decades older, which could drive up everybody's insurance costs.
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