Reviewed for accuracy on November 3, 2026 by Tina Price, one of Grove's licensed advisors.
Job-based coverage or a Connect for Health Colorado plan?
If your job offers coverage that costs you no more than 10.22% of household income for yourself alone, you can't get the tax credit. Your spouse and children are tested separately, against the cost of family coverage. They may still qualify.
Last updated November 3, 2026
The short version
- For 2027, a job offer is affordable if your own coverage costs no more than 10.22% of household income.
- If it's affordable, you can't get the tax credit, even if you turn the job plan down.
- Your family is tested against the cost of family coverage, so they may still get the credit.
- Being offered COBRA or retiree coverage doesn't block the credit. Enrolling does.
The 10.22% test
For plan years starting in 2027, an employer offer is affordable if it passes one test. The employee's cost for self-only coverage is no more than 10.22% of household income.
For example, with household income of $60,000, the line is $6,132 a year, or $511 a month. If your share for yourself alone is $500 a month, the offer is affordable and you can't get the credit.
If the offer isn't affordable, you can turn it down and get the credit on a Connect for Health Colorado plan.
Your spouse and children
Family members are tested against what you'd pay for family coverage, not for yourself alone. That rule took effect in 2023.
So a job plan can be affordable for you and unaffordable for your family. Then you'd take the job plan, and your spouse and children could get the credit on a marketplace plan.
Individual coverage HRAs (ICHRA)
Some employers give you an ICHRA, money to buy your own plan, instead of a group plan. It's affordable if the cheapest silver plan for you alone, minus the ICHRA amount, costs no more than 10.22% of household income.
If it's affordable, you can't get the credit. If it isn't, you can opt out of the ICHRA and get the credit instead. You can't take both.
COBRA and retiree coverage
An offer of COBRA or retiree coverage doesn't block the credit. Enrolling in it does, for the months you're enrolled.
Losing job-based coverage opens a 60-day window to buy a plan instead of COBRA. Compare both before you choose. COBRA often costs more without help.
If you choose COBRA and drop it early, that usually doesn't open a new window. You'd wait for open enrollment unless your COBRA runs out.
Next step
Not sure whether your job offer counts as affordable? A licensed Grove advisor can run the test with you and compare the options, at no cost.
Want a person to check your pick? A licensed Grove advisor will, at no cost. If you make Grove your broker, you can keep calling the same advisor after you enroll.
Compare plansPrices in your countyCall (970) 840-1130
Common questions
Does it matter how good the job plan is?
Affordability is about the cost to you, not the deductible or network. A plan can be affordable under the rule and still be a poor fit, so compare both.
What if my spouse has the job offer, not me?
The same tests apply. The spouse with the offer is tested on self-only cost, and the rest of the family on family cost.
Sources
- IRS Rev. Proc. 2026-26: 2027 applicable percentage table and 10.22% required contribution
- 26 CFR 1.36B-2: eligibility for the premium tax credit (employer coverage, COBRA, retiree coverage, HRAs)
- Treasury Decision 9968 (2022): affordability of family coverage (the family-glitch fix)
- IRS: Instructions for Form 8962 (household income, family size, employer coverage)
- HealthCare.gov: individual coverage HRAs (ICHRA) and the marketplace
- HealthCare.gov: COBRA coverage and the marketplace
- HealthCare.gov: special enrollment periods
This guide is general information, not tax or legal advice. Connect for Health Colorado decides eligibility and tax credits.