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A Reader Asks: My Coverage Is Intermittent. Can I Do Better On The Marketplace?

Q. I am a business analyst who works on a contract basis. My vendor has a health plan, but when my contract ends so does my insurance. This may happen more than once a year. I want to enter the exchanges because I want my insurance to be consistent. Am I restricted from buying insurance on the exchange?

A. Almost anyone can buy a health plan on the state health insurance marketplace, also called an exchange. The question is whether you would be eligible for subsidies to help reduce the cost.

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A Reader Asks: My Coverage Is Intermittent. Can I Do Better On The Marketplace?

People who earn less than 400 percent of the federal poverty level ($45,960 for an individual) may be eligible for subsidies if their employer doesn’t offer good coverage. “Good coverage” under the Affordable Care Act means the premium doesn’t cost more than 9.5 percent of your income and the plan pays for at least 60 percent of your allowed medical expenses.

Even though you work for a temporary staffing agency as a contract worker, the health insurance offered to you would likely be treated no differently than any other employer health plan under the health law, says Laurel Lucia, a policy analyst at Berkeley’s Center for Labor Research and Education. So if your temp agency offers good coverage, you won’t be eligible for subsidies as long as that insurance is available to you.

There’s another wrinkle in your case. You say that your coverage through the agency is intermittent, sometimes starting and stopping more than once during the year. When your employer coverage stops, you would qualify for a “special enrollment period” to sign up for a health plan on the exchange and, if you meet income guidelines, you could be eligible for subsidies. As long as you sign up for the same health plan on the exchange during the year, you won’t have to satisfy a new deductible every time you re-enroll, according to rules published by the Department of Health and Human Services.

But since you say your goal is to have consistent coverage, the prospect of switching back and forth between your employer plan and the exchange may not appeal.

If you’re willing to forgo your employer coverage altogether and sign up for an exchange plan for the whole year, you can. But you’ll only be eligible for premium tax credits on the exchange during the months that you don’t have access to employer coverage. Again, this is assuming your employer coverage is considered good under the health law.

Exchange plan members can choose to receive their premium tax credit either up front or the following year when they file their taxes. If you elect to take the credit up front, the IRS will send your credit directly to the insurer and you’ll pay the remaining premium amount each month.

But since your eligibility for the credit may vary month to month, depending on whether you have access to employer coverage, it could be a hassle to keep informing the exchange each time your access to coverage changes.

If you can afford it, a simpler solution might be to pay the entire premium up front and claim the tax credit for the months you were eligible for it next year when you file your taxes, says Kaye Pestaina, a principal at human resource consultant Mercer’s Washington Resource Group.

Of course, if you earn more than 400 percent of the federal poverty level, you would be ineligible for subsidies anyway. In that case, if coverage consistency is your goal there may be no reason not to sign up for an exchange plan and keep it for the whole year.

“The right answer will differ from person to person,” says Pestaina.

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