The Fargo Family: Employer Coverage, Premium Tax Credits, and Medicaid

Run the affordability test on the employee-only premium first.

• 8.39% × $72,000 = $6,040.80 per year, or about $503 per month.
• Employee-only coverage costs $310, which is below $503. The offer is therefore affordable for that spouse, and she is not eligible for premium tax credits, even if she declines it.

Then test family coverage for the rest of the household.

• Family coverage costs $1,240 per month, well above $503. Under the current rules, the affordability of family coverage is measured against household income to determine whether the other family members may receive credits. Because $1,240 exceeds $503, the second spouse and both children can qualify for premium tax credits if they enroll in a marketplace plan.
• No one is Medicaid-eligible: $72,000 is 231% of FPL, far above the 138% expansion ceiling of $43,056.

Conclusion: the employee spouse is locked into the employer plan or pays full price. The other three can be subsidized on the marketplace.

Tier matters as much as price.

• At 231% of FPL the household falls in the 200–250% band, which carries cost-sharing reductions. Those reductions apply only to Silver plans. Choosing a cheaper Bronze plan to lower the premium throws away a materially lower deductible and out-of-pocket maximum - a real error for a family with two children.
• So the comparison is not "$1,240 employer family premium versus the sticker price of the cheapest marketplace plan." It is employer family premium versus Silver premium net of premium tax credits, with reduced cost sharing layered on.
• Structuring: the employed spouse enrolls in employee-only coverage at $310; the other spouse and the two children enroll in a Silver marketplace plan with credits. Total outlay is $310 plus the net Silver premium. Whether that beats $1,240 depends on the credit, but the family should compare total cost plus deductible and out-of-pocket exposure, not premium alone.
• Avoid the worst option: declining the employer plan entirely so all four buy marketplace coverage. The employed spouse still gets no credits because affordable self-only coverage was offered, so the family pays full price for her - the most expensive structure available.

The answer flips entirely.

• $40,000 is 128% of FPL, below North Dakota's 138% expansion threshold of $43,056. The adults are eligible for Medicaid under expansion.
• The children would also be covered through North Dakota Medicaid or CHIP at that income.
• No premium tax credits are available for anyone eligible for Medicaid. Credits are for people who are not eligible for Medicaid or affordable employer coverage; buying a marketplace plan anyway means repaying credits at reconciliation for the months of Medicaid eligibility.
• The employer offer becomes largely irrelevant for the adults, because Medicaid eligibility for the expansion group is not defeated by an offer of employer coverage. The employed spouse does not have to buy the $310 employee-only plan to preserve anything.
• Practical points: Medicaid enrollment is year-round with no open enrollment window; the family should report the income drop to the marketplace immediately if they are already enrolled, because advance credits are reconciled on the tax return and the household will owe back any credits paid during Medicaid-eligible months. Income projected at application drives all of this - a self-employed household should document the projection carefully and update it when reality diverges.