A Reader Asks: With Job-Based Coverage, Can I Still Qualify For Cost-Sharing Subsidies

Q. I understand that having access to affordable employer-sponsored coverage doesn’t prohibit me from purchasing coverage on the exchange, but it does eliminate access to premium tax credits that I might otherwise be eligible for. What about cost-sharing subsidies? If I could qualify for a plan with cost-sharing subsidies on the exchange, would I be eligible for one of those plans instead of taking the coverage offered by my employer?

A. No, you wouldn’t be eligible. Under the health law, you can’t get cost-sharing subsidies unless you also receive premium tax credits, says Cynthia Cox, a senior policy analyst at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

The cost-sharing subsidies on the health insurance exchanges reduce participants’ out-of-pocket health care costs, including deductibles, copayments and their annual maximum out-of-pocket limit.

The premium tax credits, which help lower the price of a policy for eligible consumers, and the cost-sharing subsidy are linked in the law. And as you already seem to know, as long as you have an offer of affordable coverage from your employer, you’re not eligible for premium tax credits. That means you can’t get cost-sharing subsidies either.

Almost anyone can buy a health plan on the state marketplace. But if your employer offers coverage that’s considered affordable and adequate under the health law you can’t qualify for subsidies. Coverage is considered affordable if it doesn’t cost more than 9.5 percent of your income for self-only coverage, and adequate if it pays for at least 60 percent of allowed medical costs, on average.

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