In 2014, Julia’s employer will offer healthcare coverage, disqualifying her from more than $8,000 in federal support and costing both her and her employer more. How can you avoid making the same mistake?
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Julia earns $39,000 per year as a department store manager. A mother of two, Julia wants good benefits without too much cost. As of 2014, Julia’s family qualifies for $8,000 in federal support for health insurance. But if her company offers employer-sponsored health coverage, she’ll be disqualified from the $8,000 federal tax credit, and she and her employer will both pay more. Luckily, Benefitter’s team of experts can help her employer avoid this lose/lose situation.
The optimal healthcare plan for Julia’s family costs $10,000—$5,000 for Julia’s premium and $2,500 for each of her two children. In 2014, Julia’s employer intends to pay 80% of Julia’s premium and 50% of her children’s premiums in a well-intentioned attempt to comply with the Affordable Care Act. In this scenario, Julia will pay $3,500 and her employer will pay the remaining $6,500.
However, if her employer did not offer health coverage, Julia could enroll in the public exchange and qualify for an $8,000+ premium tax credit. This means Julia would pay less than $2,000 for her health insurance and her employer would only pay $2,000 to the federal government as part of their “shared responsibility payment”—resulting in significant savings for both Julia and her employer, for the same level of coverage.
For employers with midlevel-income employees, current healthcare reform has created counterintuitive opportunities. Benefitter can assess if these opportunities apply to you and can support you and your employees in making a smooth and affordable transition.