The Affordable Care Act sucks for middle class kids.

[Barack_America]

I work for a small company that is shopping for health insurance coverage. The company is small enough to not suffer penalties for not insuring our workers under the ACA. So I've been reading up on the finer points of the ACA to make sure what we'd be able to offer will be better than letting our employees go the exchanges. That's how I discovered a little-talked about loophole that's going to screw over millions of kids.**

The ACA requires that employers offer health insurance coverage to their employees and dependent children (sorry spouses, you're screwed from the get-go). The ACA requires that the cost of the premiums be "affordable" for the employee (less than 9.5% of the family's income). If the coverage costs more than 9.5%, the employee gets to participate in the exchanges and the employer faces fines.

Here's where the ACA starts to screw-over kids. The ACA does NOT require employers to contribute anything to dependent coverage (i.e. employee pays the full premium). Furthermore, there are no income caps on the cost of those premiums. 50% of the family's income? Perfectly acceptable according to the ACA. Additionally, as long as the employee's premium costs meet the 9.5% standard, NOBODY in the family gets to participate in the exchanges or is eligible for tax credits. Oh, but they are eligible to opt-out of coverage without penalty from the coverage mandate. Gee, thanks.

Bottom line, businesses that can't afford to contribute to dependent coverage may actually be doing their employees a favor by NOT offering health insurance.

As a reference:
http://thehill.com/blogs/floor-action/senate/290537-wyden-healthcare-laws-family-glitch-leaves-dependents-without-coverage
http://www.reuters.com/article/2013/03/26/us-usa-healthcare-taxes-idUSBRE92P17620130326

I'm sure this has been discussed here before, but I haven't been around in a while.

[auburngrad82]

1. I don't think I've ever worked for a company that paid for dependent insurance

They always pay a portion of mine, but as far as I can remember, anyone with a spouse (myself included) or kids had to pay for the spouse and/or kids on their own. Yes, it's expensive, but I pay it because it's a Hell of a lot cheaper than going bankrupt over medical bills.

[Barack_America]

2. I take issue with dependents being locked out from the exchanges...

...just because one person in the family has "affordable" insurance.

I don't expect every company to be able to afford dependent coverage (ours can't). It angers me that these families are going to be denied coverage through the ACA.

[Yo_Mama]

4. That's exactly what's happening.

And the spouse won't be able to get coverage from the exchange either.

No one expected ACA to be perfect, but they did expect it to allow families that couldn't buy coverage before to be able to use the subsidies to buy coverage in 2014. But it's not going to happen for many people.

[Barack_America]

9. And, sadly, it was deliberately engineered into the bill.

To keep the cost down and make the bill easier to pass. And the GOP certainly isn't going to intervene as it will play into their "Obamacare hurts the middle class" argument.

[Yo_Mama]

3. You are absolutely right

Because if the company does offer affordable insurance for the employee, then the whole family does NOT qualify for the exchange subsidy.

So if the company offers an ACA-qualifying plan to the worker for $150 a month, but dependent and spouse coverage is not affordable, then the spouse and dependents can't get coverage through the exchanges unless they can afford to pay full freight.

So a lot of people aren't going to be covered and they aren't going to be helped by ACA at all.

[Barack_America]

7. This is where Wal-Mart offering coverage would be a worst case scenario for their employees.

Can you imagine someone making $8/hr trying to come up with $500/month to cover a spouse and one child? This on top of their own shared premium costs?

[Liberal_Stalwart71]

5. I thought kids were automatically covered under their parents' plans until 26??

[Barack_America]

6. They have to be OFFERED coverage.

There are no provisions for affordability.

[Liberal_Stalwart71]

8. Got it. Let me go and do more reading on this. It's an interesting topic.

[Honeycombe8]

10. To know if it sucks, I'd have to compare it to what they had BEFORE the ACA.

What did they have before?

[Barack_America]

11. I don't understand your argument.

Are you saying that being purposefully left out of the largest healthcare reform in our nation's history CANNOT suck if you didn't have healthcare to begin with?

Why would that possibly be, particularly when the goal of said healthcare reform was to insure ALL Americans?

[Honeycombe8]

12. So they had nothing before? I disagree with you, then, that an improvement = sucks.

Your argument makes no sense.

If it's not worthwhile for a small employer to provide ins., then don't. The family then gets to participate in the exchanges and get subsidies. THAT'S the point of the ACA. It is NOT the point that small employers who did not provide ins. before would now provide it, and provide it for the whole family. Maybe you're not understanding the ACA and its goals.

The goal is to provide ins. coverage for all Americans. It has been stated many times that it falls short of that goal, but will provide coverage to about 40 million MORE people than before, or something like that.

I just don't agree with you. I think you were expecting something that was never promised or is feasible. The ACA doesn't apply to small businesses for a reason: it's not expected that they can afford to provide good ins. coverage. Hence, the exchanges and subsidies.

I think this is called looking gift horse in mouth. It sounds a bit arrogant....to get some help financially with something, and then complain that it's not enough, you want more.

I could easily complain. As an employee with decent, but not great, ins. coverage (that I have to partially pay for)...the ACA does nothing for me. But I'm not whining about it. I am happy for the ones it does help. And it would be there to help me, should I lose my job and get sick and can't get ins. coverage....no more; starting next year, I will be able to get ins. no matter what. And there's a cap on premiums (but I still won't qualify for subsidies, I think).

[Barack_America]

14. There's no financial help for middle class families.

That is the point of my argument. They had access to health insurance they couldn't afford BEFORE the ACA and they'll have access to health insurance they can't afford after the ACA. They ACA does NOTHING for these families, and was deliberately written to exclude them in order to keep costs down.

It's not about small businesses vs. large businesses. It's about restricting "affordability" to one individual and denying ACA benefits to everyone in a family so long as one person can afford to be insured. That is the exact situation many families are already in and the ACA will do nothing to alleviate it for them.

[Honeycombe8]

15. Lower middle class families qualify for subsidies. Middle class people w/o ins CAN get ins

now, if they have pre-existing conditions and couldn't get it before. High-risk policies can no longer be so high as to be considered not providing a policy at all.

But NO...the point of the ACA is NOT to give free health care to everyone. If you thought so, you weren't paying attention.

ALMOST EVERYONE will be able to get insurance, now, BECAUSE....and ONLY BECAUSE...of the ACA. But not everyone, no. Not....everyone.....Obama and others have said so repeatedly.

Be happy for the 40 million that the ACA is helping, instead of whining about people (who don't need help) aren't getting something for free. Middle class people without insurance CAN afford a basic policy, OR they can look for work where the employer provides it. UNLIKE BEFORE, there is a CAP on premiums, so policies should be more reasonable than before.

As I said LOWER middle class families (the working poor) FOR THE FIRST TIME IN OUR COUNTRY'S HISTORY will be able to get insurance because of subsidies. And THAT is a GREAT thing!!!!!!

[Barack_America]

16. Ok, let's do some math. The maximum one can make for Medicaid/CHIP coverage....

...is 300% of the federal poverty level. Most states max out at 250% of the poverty level, which is $48,000 for a family of three.

Let's assume a family of 3 makes $49,000 per year, just out of the range of CHIP coverage. Family coverage in the policies we are shopping averages out at $750 per month (excluding copays and deductibles). That comes out to $9000 per year, or 18.3% of yearly income for premiums ALONE. That's double than what the ACA deems an "affordable" amount to spend on healthcare premiums.

Do you think it's fair for a family making $49,000 a year to spend 18% of their income on health insurance premiums? Do you consider that "affordable"?** Do you think it's fair for a family making $1,000 a year over the 250% federal poverty max to be COMPLETELY excluded from federal assistance?

Maybe you do, but I would hope that most progressives would not.

**The Obama administration clearly recognizes that these families will not be able to afford coverage, but unfortunately just decided to let them opt-out of healthcare without penalty, rather than work to extend assistance to them.

[Honeycombe8]

19. I'm done arguing with you. Be happy for those it helps. Let's say it together...

come on...let's say it together:

I...am....happy...for...the....millions...of...people...that....the....ACA...is....and...will...in...the...future....be....helping.

I...am...happy...for....free....preventive....care....for....everyone.

There, now. That's not so hard, is it? Of course not. Unless...unless you don't WANT the ACA to be considered good in any way. Which is what it looks like.

[Barack_America]

20. You're willing to write-off 3.9 million Americans. I'm not.

You do realize that the ACA is able to both be good and bad at the same time, right?

The ACA is good for lower income and lower middle class kids. It is also going to leave a lot of solidly middle class families in a lurch. It's bad for them, and it was foolish for Dems to pass the bill, knowing this was going to be an issue. Expect to hear a lot from Republicans in 2016 about how "Obamacare" helps the poor at the expense of the middle class. Not attempting to fix the "family glitch" plays right into the GOP's attack on the ACA.

Several prominent Dems in Congress are angry about this. Would you be so snarky and dismissive to them?

[jasmine1972]

21. Fed Subsidies available for 100-400% FPL in the Marketplace

In this scenario, you can still get subsidies in the Exchange (but no OOP cost reduction above 250% FPL). Since $49K is 251% FPL, they have to pay 9.5% of their income, or $4655/yr. The rest ($4345) is subsidy. A family of three is eligible for this 9.5% limit up to incomes of $78120.

If their income had been $48630 (249%), they would pay maximum 8.05% or $3915/yr. Its based on the principle that the more income you make, you should cover the greater proportion of your costs. The plan (<250%) makes them eligible for cost reductions in their OOP.

Does this help you understand the "affordable" part of ACA now?

[Barack_America]

22. Not available for those with employer-based coverage.

If one family member gets "affordable" coverage through the employer, nobody in the family (save, perhaps, the spouse if they are excluded from the employees policy) gets to participate in the exchanges -OR- gets the subsidies.

I welcome you to read about it. This site does an excellent job at describing various scenarios families face.

http://www.gbophb.org/TheWell/Root/HFLX/4523.pdf

[uppityperson]

23. Every time I have had employer based coverage, my employer paid half+ the cost of the insurance.

Are you saying if I get employer based coverage, my spouse MUST get it also as they do not have the option of participating in the exchanges?

From your link

In determining whether an employer’s health plan is “affordable” for “related individuals” (i.e., spouses and
children of a covered employee) for purposes of determining eligibility for the PTC, the IRS will look at the cost
of coverage only for an individual employee—not for the family. Even if employer health coverage is
unaffordable to an employee’s family at the family-coverage level, family members will not be eligible for PTCs
to purchase coverage through the ACA’s health insurance exchanges (Exchanges) as long as the employee-only
cost of the offered employer coverage is less than 9.5% of household income. In cases where family coverage is
prohibitively expensive and the employee declines employer-provided coverage of his or her dependent children
or spouse, PTCs would still not be available to help the family purchase insurance for children or the spouse
through an Exchange. There is an additional consideration regarding spouses because employers are not required
to offer spouse coverage, which is explained below.

[Barack_America]

24. The ACA requires dependent children be offered the employer-based coverage...

...but not the spouse. So if the coverage is not offered to the spouse, he or she could participate in the exchanges. But the children would be ineligible. They would either have to buy the employer's coverage or go without (though they would be exempted from the mandate).

[jasmine1972]

25. It certainly is unclear.

Despite what that letter says, it is my understanding that the employee can choose to decline the option to get coverage for their dependents under the employer plan, and buy coverage for their uninsured spouse and dependents (if they are not already eligible for Medicaid or CHIP) on the Marketplace - and still be allowed to get tax credits if otherwise qualified.

The Affordable Care Act ALLOWS children up to age 26 to stay on their parents' health plan, if the plan includes coverage for dependents, but it does not REQUIRE it. The personal responsibility requirement and subsidy eligibility are totally dependent upon the status of the individual, not the family (except has it relates to family size and income). If the employer choses to buy insurance on the exchange for the rest of his family, the employer is NOT penalized, because he fulfilled his 9.5% and minimum value requirement. I am trying to get this clarified, but I think the references are misinterpreting the rules - but I COULD be wrong. I hope not.

[Barack_America]

26. Unfortunately, you have to take what your employer offers.

If it is "affordable" for you, then you are locked out of the exchanges, as are your covered dependents.

I read about this a lot this year as I was part of my company's decision-making process whether to offer coverage or allow our employees to go on the exchanges. We chose to offer coverage, though the small number of families we employ (mine included) would have been better off if we hadn't.

[gopiscrap]

28. Welcome to DU

[dkf]

27. It's going to be company by company.

UPS is dropping spousal coverage for example. And if the required subsidy for the employee is larger than what was currently provided the odds that there will be less subsidy for the spouse and kids is greater. Add to that the many extra coverages they are adding like no copay for preventive visits, and it's likely the plan is more expensive.

Lastly just because the spousal and dependent coverage are super expensive doesn't mean you are exempt from the individual mandate. So you may not be able to afford coverage and be hit with the individual mandate increasing up to $600/3 people.

[lhooq]

13. On fixing the ACA and its suckiness

Two points.

First, the ACA is hardly a done deal. Any huge piece of legislation is going to have bugs in it needing fixing. Barack_America has identified one such bug. So it may not be accurate to write about the ACA as if it were some static entity "carved in stone". Medicare, for example, has been tweaked and changed often since its inception in 1965.

That said, I don't see much Congressional effort on fixing the ACA. Dems are scared sh*tless of it being a train wreck derailing the 2014 election, and Repubs just want to nix the whole thing.

Second, you think the ACA sucks for you? Consider those of us with incomes under 100 percent of the FPL (federal poverty level) who happen to live in red states not expanding Medicaid. Here in Florida that's around a million of us. Our income is too low to qualify for subsidies for policies purchased on exchanges. We were supposed to taken up by the expanded Medicaid -- but then the US Supreme Court decided that Medicaid expansion is optional. As best I understand, there is nothing the ACA offers for people like me. Please correct me if I am wrong.

Seems to me that we need to reduce, not expand as the ACA does, the role of insurance in health care. But perhaps in my disappointment I am slipping and yielding to conservative rhetoric ...

[Safetykitten]

17. Oh dear, more details of the ACA become known, but really...

What you described was unique, a one off, maybe 10 people in the nation are like this.

Get ready, this ACA is the nightmare of nightmares.

[Barack_America]

18. 3.9 million dependents (mostly children) according to Wyden's estimates.

http://thehill.com/blogs/floor-action/senate/290537-wyden-healthcare-laws-family-glitch-leaves-dependents-without-coverage

Not a small number at all.