Health Reform Questions – Family Member Eligibility for Premium Credits

Nov. 26, 2013

Question: In 2014, will an employee’s nonworking spouse be eligible for premium credits or subsidies on the Exchange if (1) the employee’s employer does not offer medical coverage to employee’s spouse or (2) the employer offers medical coverage to the employee spouse’s but does not pay for any portion of the premium for such spouse’s coverage? 

Answer: Under Treasury Regulations Section 1.36B-2(c)(3)(v)(A)(2), an eligible employer-sponsored plan will be affordable for related individuals (family members) if the cost of self-only coverage does not exceed 9.5% of the employee’s household income. In other words, for purposes of determining whether family members are eligible for premium tax credits, the cost of family coverage is not taken into account-all that matters is whether the cost of self-only coverage is affordable to the employee.

Therefore. if an employer offers coverage to the employee’s spouse, but does not pay for any part of his or her premium, he or she will not eligible for credits and subsidies if the coverage offered to the employee is affordable.

If an employer does not offer coverage to the employee’s spouse, he or she would be eligible for credits and subsidies depending on the family’s household income.