Calculate The Health Care Affordability Worksheet

Overview

The ACA establishes affordability requirements for health insurance plans sold in the individual and small group markets. A plan is considered affordable if the total cost of premiums does not exceed a certain percentage of your household income.

This worksheet helps you calculate whether your plan meets these affordability standards. The key components to consider are your household income, the number of people in your household, and the total cost of your health insurance premiums.

How to Use This Worksheet

1. Enter your total household income for the year.
2. Select the number of people in your household.
3. Enter the total monthly premium cost for your health insurance plan.
4. Click "Calculate" to determine if your plan is affordable.

The calculator will show you whether your plan meets the affordability requirements and provide guidance on what to do if it doesn't.

Formula

The affordability calculation is based on the following formula:

A plan is considered affordable if the affordability percentage is 9.86% or less for a single person, 8.36% or less for a family of two, 7.56% or less for a family of three, and 6.96% or less for a family of four or more.

Worked Example

Let's say you have a household income of $60,000 and your health insurance premium is $300 per month.

1. Calculate the monthly income: $60,000 / 12 = $5,000
2. Calculate the affordability percentage: ($300 / $5,000) * 100 = 6%

Since 6% is less than the 9.86% threshold for a single person, your plan is affordable.

Interpreting Results

If your plan is affordable, you can continue with your current coverage. If it's not affordable, you may qualify for financial assistance through the Health Insurance Marketplace.

Additional factors to consider include:

• Your plan's deductible and out-of-pocket maximum
• Whether your plan meets essential health benefits
• Your eligibility for premium tax credits