I have Insurance through work but it’s unaffordable. Can I get insurance and a subsidy through Covered California?

By Theresa Struckmeyer,

Certified Covered California Insurance Agent

To finish up my most frequently asked Covered California series, let’s go with the most controversial of all the questions. This question comes from our friends who are offered health insurance through work except in their opinion it is not affordable. Can these Californians enjoy the same subsidies and low price insurance offered through Covered California?

The answer is SOMETIMES but SOMETIMES occurs very rarely. In order to qualify their insurance must be unaffordable or not meet minimum coverage standards. Here is the issue with this answer, affordable is very subjective and many Californians think that if they feel their insurance is unaffordable, then they will be able to qualify but it isn’t that simple. There is an actual definition to what is considered affordable. The definition of affordable is health insurance that costs less than 9.5% of an employee’s income. The way this is calculated is off of the lowest cost minimum coverage plan that is offered through work for the employee’s portion of insurance cost only. This last statement of calculating it off of the employee’s coverage only is what confuses most people.

To further illustrate this calculation let’s use an example of our friend Ben. Ben is a manager at ABC Company and he makes a nice living of $6000 a month before taxes. Ben is married and has two children. The lowest cost plan for Ben and his family would be $800 a month. $800 is over 13% of Ben’s income so he feels he qualifies for a Covered California subsidy and health plan. Unfortunately Ben is calculating this incorrectly. The way affordable is calculated is how much does insurance cost for HIM ALONE. Ben’s insurance premium for him alone is $150 per month. This is under 9.5% of Ben’s income so he technically has access to affordable insurance through work. Furthermore, this plan qualifies as meeting minimum coverage so Ben and his family do not qualify for a tax subsidy.

Most will agree that the way this works makes it very hard for many families to afford health insurance so what is Ben to do? Even though Ben’s family does not qualify for a subsidy he still has options. He can purchase his work insurance or he can shop elsewhere. Here is where the advice of a qualified insurance agent can come in handy. There are several things to look at here. How much insurance does his family need? Also, how can Ben be creative to get the best insurance to suit his family’s needs at the lowest cost? In Ben’s case I would recommend that he get his insurance through work as he cannot get a lower cost than $150 a month for his insurance but we could put his wife and kids on a separate plan to help save money.


Let’s say Ben wants to make sure to have prescriptions covered and he wants the peace of mind of a low deductible in case of an unexpected illness or injury. In Ben’s case a Silver plan would be the answer. Silver plans start at $505 a month for his wife and kids. If he pays $150 for his insurance and $505 for his family he now is only paying $655 a month. This makes his insurance a lot more affordable. If this is still a little steeper than he would like, there are other alternative that may work for Ben.

Ben and his family are the typical case that fall through the cracks in the Affordable Care Act. It is unfortunate that Ben’s family does not qualify for a tax subsidy due to his work insurance but it is the way it is unless the definition of affordable is changed. It’s important that families explore their options and understand if they qualify or not. There is much more to it than just income. The help of a Certified Covered California insurance Agent who understands the rules and can help explain options is not only free but it can also help save Ben a lot of headaches and issues in the future should he try to go it on his own and mistakenly take a subsidy he does not qualify for.


If you have questions about Covered California we are just an online chat, email, or phone call away at 855-731-8888.



MP Insurance Solutions is a Covered California Certified Insurance Brokerage. We specialize in Covered California Health Plans, Off Exchange health insurance,  Term Life Insurance, Final Expense Insurance, guaranteed income annuities, and dental and vision plans. We specialize in helping those in Southern California including Los Angeles, Riverside, San Bernardino, San Diego, and Orange County California.
23873 Clinton Keith Road Suite 210, Wildomar, CA 92595    Office: (951) 698-9267

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