Many student/trainee University employees better off in exchanges
August 6, 2014 Leave a comment
N.C. Republican Rep. Mark Meadows is pushing an effort to exempt student employees in the North Carolina system from counting as an employee for the purposes of the employer mandate, delayed until Jan 1, 2015 (I suspect it will be delayed again, but that is another story). In this case, exempting student workers from Obamacare, actually means that most of them will be better off buying health insurance in an Obamacare exchange than they would be with the N.C. State Employees Health Plan, due to the premium subsidies that are based on income that are available in the Obamacare exchange.
A quick example. I know an adjunct/trainee type at UNC who makes around $30,000 in their job (teaching to make $$ while finishing their dissertation after fellowship funding ran out). This person has a spouse who is not employed and a 15 month old baby.
- If they had the State Employees Health Plan (SEHP) coverage that the University of N.C. system doesn’t want to provide, the employee premium for family coverage would be $562.94/month (this does not include how much the University would have to pay for the employers side of the premium; it would be substantially larger than this, but I haven’t looked up the amount).
- Looking at an average premium in their zip code using an ACA calculator, the premium for the couple is around $100/month (not the total cost of the insurance; there is very large subsidy ~150% of poverty level as they are).
This is a no brainer from the standpoint of the adjunct/trainee; the subsidized ACA coverage has a tons cheaper premium, and they also qualify for OOP cost share subsidies at that income level. The University system saves money on benefit costs and it is obvious why they would be for it. This does represent a shift in financing burden to the federal government for the ACA premium subsidy. A primary goal of the law is to subsidize health insurance for folks, but not for the employees of large employers; the “exemption” would be to not consider these student/trainee employees as employees.
The adjunct/trainee types are already under a mandate to be insured that is imposed by the University, and there is a student health based plan, that many of them, but perhaps not all, could purchase. I haven’t gotten into that calculus, but I remember when I was a Ph.D. student my family avoiding this type of insurance when we had an infant due to our perception of what it covered.
Rough guidance: if you are talking about this type of trainee/lower wage employee with a family (lets say under $40,000/year), they will be better off buying in the Obamacare exchange. If they are single, they would be better off with State Employees Health Plan, because the SEHP still have a $0 employee premium option for their 70/30 plan, and a premium of $13.56/month for the 80/20 (a 30 year old single ACA premium would be ~$200/month at $30,000 salary; some in this category would be eligible for the student health based plans, others might not be).
You could do a more complicated analysis, but that is the gist of it. However, understand that in this case, exempting a type of employees from Obamacare rules (saying they are not employees) means that many of them will end up being insured in the Obamacare exchanges. Fine with me, but it does raise a possibility of an ACA modification. Go back to the Clinton era reform discussion of “pay or play” not as a sin (language of dumping employees to the exchanee), and towards a choice to be undertaken by employers.