Under the proposed rules, health insurance provided by an employer is considered not affordable if a worker pays of premium of more than 9.5 percent of the worker’s household income. The Internal Revenue Service says this calculation should be based solely on the cost of individual coverage for the employee and not coverage of a spouse or children.
A glitch in the language of Obamacare could make the “affordable” health plan unaffordable for millions of American workers, the New York Times reported.
Wrangling over the legal definition of “affordable” could mean some families would be unable to afford family coverage offered by their employers, and would also not be eligible for subsidies, according to the Times.
For a family making $35,000 a year and paying $4,130 in family health coverage through an employer’s plan—12 percent of the family’s total income—the costs would be deemed affordable under Obamacare and they would not be eligible for government subsidies.
“This is a serious glitch,” said Bruce Lesley, president of child advocacy group First Focus. “Under the proposal, millions of children and families would be unable to obtain affordable coverage in the workplace, but ineligible for subsidies to buy private insurance in the exchanges” to be established in each state.
Under the proposed rules, health insurance provided by an employer is considered not affordable if a worker pays of premium of more than 9.5 percent of the worker’s household income. The Internal Revenue Service says this calculation should be based solely on the cost of individual coverage for the employee and not coverage of a spouse or children. Family coverage typically costs much more.
Critics argue that these need to be taken into account and could have “huge practical consequences,” according to the Times, affecting who gets help from the government in buying health insurance.
“The effect of this wrong interpretation of the law will be that many families remain or potentially become uninsured,” said a letter to the Obama administration from Democrats who pushed the bill through the House in 2009-10, according to the Times.
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