How Much Can Your Employees Earn And Still Qualify for Financial Assistance for Enrolling in an Exchange Plan?

Lyndsey Barnett

HHS recently announced the federal poverty guidelines for 2015. Prior to the ACA, employers never had much reason to be concerned with the federal poverty guidelines. Beginning this month, large employers are subject to a pay or play penalty if they don’t provide affordable minimum value health plan coverage to employees working 30 or more hours per week if even one employee goes to the public exchanges and receives financial assistance. Individuals are eligible for financial assistance if: (i) they are not eligible for Medicare, Medicaid or another governmental insurance program; (ii) they are not eligible for a minimum value affordable employer-sponsored plan; (iii) they are not enrolled in an employer-sponsored plan; and (iv) their household income is between 100-400% of the federal poverty level. The fourth requirement is why employers may have curiosity as to the federal poverty guidelines.

The following chart highlights the household income range that would entitle an individual to a premium tax credit based on his or her family size:

 Family Size  100% of FPL 400% of FPL 
 1  $11,770  $47,080
 2  $15,930  $63,720
 3  $20,090  $80,360
 4  $24,250  $97,000
 5  $28,410  $113,640
 6  $32,570  $130,280

This means that in 2015, a family of four can receive financial assistance if they enroll in an exchange plan (and meet the other requirements to be eligible) and have household income of less than $97,000. Wow! But remember, as an employer you still don’t need to concern yourself with the poverty guidelines as long as you provide affordable minimum value coverage to all of your employees who work 30 or more hours per week.