4. What is the “free-choice voucher” and how is it different than the free-rider provision?

The free-choice voucher provision would require employers that offer coverage to their employees to provide a free choice voucher to employees with income less than 400 percent of the federal poverty line whose share of the premium exceeds 8 percent but is less than 9.8 percent of their income and who chooses to enroll in the Exchange. The voucher must be equal in value to what the employer would have contributed otherwise to the employee.

Unlike the free-rider provision that requires employers to pay a penalty if employees get premium subsidies in the Exchange, employers providing free-choice vouchers will not be subject to penalties.

In mid-April, 2011, however, the free-choice voucher provision was repealed as part of the FY 2010 budget debate.

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