Under what circumstances will an employee receive a premium credit under the Affordable Care Act?

Author: Jayne Zanglein, Western Carolina University

An employee may be eligible for a premium credit under three circumstances:

  1. The employer does not offer coverage;
  2. The employer offers coverage that is unaffordable under its chosen safe harbor (i.e., the monthly premium exceeds 9.5 percent* of the employee's household income); or
  3. The employer offers coverage that does not provide minimum value (i.e., the plan pays, on average, less than 60 percent of the covered health expenses).

*The IRS equalized the rates at 9.56 percent for the 2015 plan year and 9.66 percent for the 2016 plan year.