Be Well: Think health insurance premiums on the exchange are cheaper than at work? Think again.

Employer-sponsored insurance cost rising

Pemiums for employer sponsored plans have been increasing steadily for years. The consulting firm AON Hewitt released a report in October saying that the average health care premium rate for large employers was the lowest increase in a decade last year. But, as we all know personally, we have seen rate hike year after year. Some years have been less painful than others. And, unfortunately, the Hewitt report notes that workers will go back to seeing premiums increase their more normal 6 to 7 percent in 2014.

As for small and medium-sized businesses? Many experts believe they are going to be hit even harder.

In addition, workers are paying more out-of-pocket for things such as co-payments and deductibles. Employee out-of-pocket costs increased nearly 13 percent last year, according to the Hewitt study.

Can you get a cheaper policy by going to the exchange?

SARAH: First, let's look at what is available on the exchange. On a recent evening, I pulled up and clicked on the "see plans before I apply" button. Under the federal law, health insurance prices can no longer be based on previous health issues or whether I'm male or female.

RICK: Right. So what did you see?

SARAH: My least expensive plan was a bronze plan of $184 a month with a $5,000 a year deductible. Maximum out of pocket was $6,350. I also found a gold plan for $384 a month with a $750 a year deductible and same out of pocket costs - that might be better for me if I had some health issues.

The results are going to vary by age.

RICK: But what if you qualify for subsidy?

SARAH: That's not generally possible. If you have employer-based coverage available to you, you're not eligible for any subsidies or premium assistance.

I called Caroline Pearson, a vice president at the national consulting firm Avalere Health to talk about this:

"People have been so excited to hear that there is new coverage and there may be subsidies available and they may not realize that if they actually have employer sponsored insurance that even if they are not thrilled with what they've got that they are NOT going to be eligible for subsidies as a result of that offer of coverage," Pearson says.

She adds: "So, basically, what the law is trying to do is keep everybody in the insurance e that they've got and reduce the number of people getting subsidies. So if your employer is subsidizing you - as long as that coverage is not considered unaffordable, then you're actually required to take it or of course pay the penalty if you go uninsured."

SARAH: So, now the question becomes, what is "considered unaffordable." Right?

RICK: Exactly. Yes.

SARAH: The answer is defined by law: If your share of the premium in your employer plan is 9.5 percent or more than your household income, then it is considered unaffordable and you might be able to get a government subsidy on the private exchanges.

RICK: That's 9 and a half percent of gross income, the amount you earn before taxes are taken out…?

SARAH: Yes. Also, it's important to point out that the rule says household income…so your employer insurance would have to cost you more than 9 and a half percent of the income you and your spouse earn together. Another way to say it is - if you are married and your spouse has "affordable" insurance through their employer, you won't get a subsidy.

RICK: What it all means is that most people aren't likely to find cheaper health insurance that is comparable to what they have now through an employer.

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