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Small Business Employee Benefits and HR Blog

What is the Average ObamaCare Premium?

December 15, 2014
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As a small business owner comparing health insurance options, you may be wondering how much ObamaCare premiums cost. In 2014, the average ObamaCare premium cost $346/month before federal subsidies, and $82/month if you received federal subsides. Of course, what you and your employees will pay for coverage depends on a few factors. Here's a look at the cost of individual health insurance through the ObamaCare Marketplaces.problem-pixabay

Average ObamaCare Premiums Cost $346/Month Without Subsidies, $82/Month With Subsidies

In 2014, the average individual health insurance premium purchased through the Health Insurance Marketplaces, before federal subsides, was $346/month.

If you're like 87 percent of those who shopped on the Marketplace in 2014, you'll receive a discount on your health insurance. The average cost with a federal subsidy in 2014 was $82/month across all types of plans. 

cost_obamacare

Download this free guide to look up average premium costs by state.

What an ObamaCare Premium Will Cost You

What you pay for individual health insurance depends on a few factors:

  • Your state and region
  • Your age
  • Type of health plan you select (the coverage level, carrier, etc.)
  • Your tobacco use
  • Your income (as eligibility for the federal subsidies is based on your household income)

As you can see from the list, health conditions and pre-existing conditions no longer impact your ability to get individual health insurance, and won't impact what you pay.

How the Federal Subsidies Work

You are eligible for the federal subsidies if:

  • You are not offered employer-provided health insurance (through your workplace or your spouse's),

  • You purchase an individual health insurance policy offered on your state's Marketplace, and
  • Your household income is less than 400% of the Federal Poverty Level (FPL). This translates to $46,680/year for an individual and $95,400/year for a family of four in 2014.

The federal subsidies act as a cap on the amount you pay. If you are eligible, the subsidy caps the amount you'll pay for your premium on a sliding scale between 2% and 9.5% of your income.

To learn more about the federal subsidies for health insurance, see this article.

How ObamaCare Premiums Compare to Group Health Insurance

Many small business owners are comparing the cost of individual health insurance to the cost of group health insurance. A common misconception is that individual health insurance costs more.

In 2014, the cost to cover a single employee with group health insurance averaged $502/month. Compare this to an average of $346/month for individual health insurance - or to an average of $82/month if you qualify for federal subsidies.

In fact, one of the primary reasons small business owners are canceling group health insurance in favor of individual health insurance is that individual health insurance costs less. Additionally, your business can set up a premium reimbursement program to reimburse employees for their individual health insurance premiums, as an alternative health benefit to group health insurance.

See also: Individual Health Insurance Costs up to 60% Less - A State by State Comparison

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