The IRS has finally issued rules for the affordable implementation of ObamaCare. Sparking controversy is this:
WASHINGTON — In a long-awaited interpretation of the new health care law, the Obama administration said Monday that employers must offer health insurance to employees and their children, but will not be subject to any penalties if family coverage is unaffordable to workers.
The new rules, to be published in the Federal Register, create a strong incentive for employers to put money into insurance for their employees rather than dependents. It is unclear whether the spouse and children of an employee will be able to obtain federal subsidies to help them buy coverage — separate from the employee — through insurance exchanges being established in every state. The administration explicitly reserved judgment on that question, which could affect millions of people in families with low and moderate incomes.
Many employers provide family coverage to full-time employees, but many do not. Family coverage is much more expensive, and the employee’s share of the premium is typically much larger.
The gist is that employers are not obliged to weigh a worker’s family status in deciding his total compensation, which makes sense – because the family insurance can cost an extra $10,000 per year, an employer would have a strong incentive to avoid family guys and gals when hiring for lower paying jobs.
Unfortunately, this means that a stay-at-home spouse becomes a tremendous financial burden due to lost federal subsidies; the employed partner’s income can make the couple ineligible for Medicaid but the federal subsidy for health insurance may not be available either. Better never to marry – its the worst that could happen from a financial planning perspective, despite plenty of social science suggesting it has other benefits.