Using NJ state and federal subsidies, the Affordable Care Act (ACA) helps eligible individuals and families afford health insurance. The American Rescue Plan Act has increased the amount of financial help available, with no one paying more than 8.5% of their income for health insurance when not offered affordable group health insurance through work. New Jersey has its own subsidy program, the New Jersey Health Insurance Premium Tax Credit (NJHPTC), funded by state taxes, fees, and assessments on health insurance companies and hospitals, as well as the state's general fund. However, NJ added subsidy may cause small employers to stop offering group health plans. To be eligible for NJHPTC, individuals, and families must meet certain income requirements, and the amount of subsidy varies based on the number of insured individuals. For example, an individual making 150% of the Federal Poverty Level will receive combined subsidies, making many health plans have zero premiums. Adults making less than 401% of the FPL get an extra $100 a month, and incomes between 401% to 600% of the FPL will get $50 a month. Children dependents under age 19 default to the Children's Health Insurance Program at zero cost if the household earns less than 355% of the FPL. The adults receive the NJHPTC as indicated above. If the child is over 18, they are treated as an adult, getting up to an additional $100 credit per child under 400% of the FPL and $50 from 401% up to 600% of the FPL. The CHIP insures over one million children in NJ, and growing the pool is a priority to move to a one-payer system. To avoid a child's eligibility for CHIP, the family must report an income over 355% of the FPL, or they can refuse the free coverage and enroll their children in a non-subsidized plan through the same insurance companies offered to adults. The Child Health Insurance Program offers comprehensive coverage, including dental and vision. When a state takes funds from the health industry and hospitals to fund the subsidy, insurance companies and hospitals will pass the cost on to all users, increasing the overall cost. Eventually, as small group premiums increase, many employers will stop offering group coverage and direct employees to purchase subsidized individual plans. The Family Glitch Fix will further enlighten employers about how little individuals pay for health insurance. The fix allows dependents of employees covered by group health plans to enroll in subsidized individual health plans if the household cost is determined unaffordable. Groups under 50 employees do not have a penalty for not offering health insurance, so when the cost can be sliced in half, an employer's premium contributions may be better allocated to other benefits or an increase in pay. The subsidy programs aim to balance the cost burden across different groups, with the hope that increased access to healthcare will ultimately lead to better health outcomes and lower overall healthcare costs in the long run. With over forty years of experience, I feel usage will increase, moral hazard will not lead to better healthcare outcomes, and participants will demand the entitlement to be maintained while others pay the cost.

The "Family Glitch Fix" allows employees with dependent group health coverage to save thousands. Once notified, the fix allows employee dependents denied access to subsidized individual health plans to enroll immediately. Call us, and we can check affordability in seconds, then calculate your monthly savings in any health plan offered in your area. If your employer offers group health insurance and you have dependents, you may be able to lower your premium costs and their out-of-pocket costs for medical care. The so-called "family glitch" stems from a 2013 IRS interpretation. Under Section 36B of the Internal Revenue Code, individuals generally do not qualify for premium tax credits if they are eligible for another source of minimum essential coverage, including employer-sponsored plans. There are two exceptions to this rule under the ACA-when the offer of job-based coverage is not "affordable" or not of "minimum value." If either exception is met, an individual is ineligible for minimum essential coverage, making them eligible for premium tax credits. An employee needs to do this simple test with individual plans less expensive than most group health plans, even without subsidies. With federal and NJ subsidies, the monthly savings are larger than the average car payment.

In 2023, inflation is the central talking point, and health insurance premiums and medical costs are increasing. Small employers must look at benefit costs with salary, and supply costs increasing. If a business offers health insurance, there are three options; Level Funding, Fully Insured, and Individual Health Plans. Level funding is the new option with reduced premiums and more comprehensive provider access for groups with good claims experience. Health questions are asked, and past medical usage is checked for insurance companies to select groups that are likely to have lower claims expenses than the premiums paid. Groups with as few as two employees can enroll, and the final premium rates remain level for the policy year. Level funding is a great place to start if you want to see if your groups can save while still having the option to fall back on guaranteed, fully insured health plans. Fully insured plans are changing and offer savings by reducing provider access, especially to out-of-state providers. Many plan designs are moving away from copays on brand name prescriptions and shifting higher cost sharing to employees. The fully insured plans are favored by employers, paying the lion's share of premiums and wanting to offer benefits with little employee involvement. The small group's health market is yielding to the individual health market that offers rich federal and (NJ State) premium subsidies to employees and cost-sharing reductions on out-of-pocket costs. The Family Glitch law allows dependents for employees covered by group insurance to take advantage of individual subsidies if the employee's cost to insure their dependents is unaffordable. In NJ, the state exploits the small group market by taking premiums and funding individuals not covered by group insurance. The best program depends on the business's unique needs and its employees. All groups should offer health insurance as employees are also crushed by inflation. Employees need expert advice to take advantage of any offer and will be more productive, resulting in lower absenteeism from financial loss.