Employer Health Insurance: What is It & is My Employer Required to Offer?
Employer health insurance is a benefit offered by your employer to cover a portion of your health care costs. Many times, health insurance within a company or organization is less expensive than buying a plan individually because the employer pays for a large portion of your monthly premium. In this article, we evaluate what employer health insurance is and who is required to offer it.
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Not All Employers Are Required to Provide Health Insurance
Employers aren’t necessarily required to provide health insurance in the United States if they classify as a smaller business. The requirements fall in line with the number of employees a business has, and some state laws might change the requirements, depending on where you live.
Dr. Kate Tulenko, a health workforce expert at Corvus Health, explains why employers are not required to provide health insurance for their employees;
“The Affordable Care Act (ACA) does require large employers (50 or more full-time employees) to provide health insurance to 95% of their workers or pay a fine. The health insurance provided must meet certain affordability requirements and must cover a minimum set of essential services. Whether individuals have to pay a penalty if they do not have health insurance depends on their state of residence and is in flux due to lawsuits challenging the ACA”.
Group Health Insurance vs. Employer Health Insurance
Group health insurance is an insurance plan that covers a group of people who are employees of a company or part of an organization. The employer purchases the plan and employees are often given a small discount. Although it is not required to be on your employer's group plan, many people choose to be covered by group insurance for several reasons.
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Group Insurance Explained
Generally, there are three types of health plans your employer may offer: HMO (Health Maintenance Organization), EPO (Exclusive Provider Organization), POS (Point of Service), and PPO (Preferred Provider Organization). Depending on the level of cost-sharing, most employers pay anywhere between 50-70% of your health plan.
Many group insurance plans can cover immediate family members, or dependents, such as a spouse and children. Additionally, the premium rates for all employees are determined by the insurer, and part of the employees‚ premiums are paid for by the employer.
The Cost of Group Insurance
The average costs of a health plan are $500 per individual and $1,000 per family. This means you can expect to pay $150 - $300 a month out of your salary. In some cases, your employers can opt to pay for 100% of your health plan, but if there is a deductible (the amount you are responsible for before the insurance starts kicking in), you still have to pay a certain amount out-of-pocket.
Deciding if You Should Accept Your Employer’s Health Insurance Plan
While it may be convenient to accept the health insurance plan your employer is offering, it's important to evaluate if it's actually worth accepting based on your healthcare needs.
Dr. Tulenko explains how to determine if the plan is right for you:
You should start by comparing the health insurance plan that your employer is offering with ones that you can purchase in your state health insurance market or the national health insurance market. Some factors to consider include:
- Who will be insured (just you or you and your family)?
- What the monthly expenses are; including premiums, copays, deductibles.
- What services are covered (for example some insurers cover fertility treatments and some do not)?
- Whether you will be able to keep your existing physicians or will need to find new physicians in the health insurance network?
- How far you may need to travel for care, or how quickly you can get an appointment within the network.
- Is there dental and vision coverage?
You can also consider speaking with someone who has the health insurance plan you are considering to find out what they like and don't like about the plan.
The Affordable Care Act does not require dental or vision coverage but many employers offer it. Consider other health-related benefits such as paid sick leave, Health Reimbursement Arrangements (HRA), and Health Savings Accounts (HSA).
Alternative Options if Your Employer Doesn’t Offer Health Insurance
There are several options to get healthcare coverage if your employer does not offer one:
- If you are under the age of 26, you are permitted to stay on your parent's health insurance. In New York, you may be qualified to stay on your parent's insurance through age 29. Some of the qualifications include that the individual is: unmarried, uninsured by the employer, and lives in New York.
- If you live in the United States, you are eligible to sign up for a membership with Mira. It’s just $45 per month and includes affordable urgent care visits, lab testing, and discounted prescriptions. Sign up in just 30 seconds.
- You can buy an individual plan through a health insurance company. You can sign up for an individual plan during the open enrollment period, which typically runs from mid-November to early December. If you recently experienced a major life event, you may qualify for a special enrollment.
- If you are married and your spouse’s employer offers health insurance, you may be able to get coverage through his or her plan.
- You may be able to get group health insurance by joining a professional organization. Here are a few organizations that offer group health insurance: Alliance for Affordable Services, National Associations for Female Executives, Freelancers Union, and Writers Guild of America.
While some employers are required to offer health insurance to their employees and some are not, it’s important to understand exactly what you are getting in terms of coverage. Group insurance and other alternatives may present as good options for you. Mira is just $45/mo and members have access to low co-pays, discounted prescriptions, and more. Sign up today to get covered.