Who Would Benefit From Removing Employer Coverage ‘Firewall’?

Between 6% and 13% of people in nonelderly households with employer-sponsored coverage could pay lower premiums in the Affordable Care Act marketplaces if there was no longer a “firewall” preventing people who have access to affordable, comprehensive employer-based coverage from accessing ACA subsidies, according to a study by the Commonwealth Fund. Currently, an estimated 26% of nonelderly people with employer coverage whose income is below 200% of the federal poverty level (FPL) spend more than 8.5% of their income on after-tax premium contributions. The researchers analyzed the potential effects of allowing more employees to use subsidies to purchase ACA marketplace plans, both with the current subsidy schedule and an enhanced schedule that passed the U.S. House of Representatives in June 2020 and would extend subsidies to all income levels and caps premiums contributions at 8.5% of income. The study found that Black, Hispanic and American Indian or Alaska Native individuals could particularly benefit from such a policy change, as could individuals in the South.

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