Employers started offering health insurance in the 1940s to attract and retain workers. This type of insurance helps people reduce their healthcare costs.
Today, laws require certain employers to offer health insurance or pay a penalty tax while others don’t have to. It largely depends on the size of the company. Here’s what you need to know about employers and health insurance.
WHAT ARE THE MAIN HEALTH INSURANCE OPTIONS IN THE U.S.?
You might hear terms like individual, Marketplace, Medicare, SNAP, and self-funded as health insurance options. Ultimately, all of these insurance types come from three sources.
The main types of health insurance in the U.S. include:
1. Private insurance that your employer offers
2. Private insurance that you pay for yourself
3. Public/government-sponsored insurance (such as Medicare and Medicaid)
Some companies offer health insurance as part of their employee benefits package. While employers don’t have to offer you a range of plans, many do. If more than one plan is available, it usually comes down to a high-deductible health plan with a lower monthly premium, or a plan with a lower deductible and higher monthly premiums.
If you’re getting insurance from your employer, you are responsible for your portion of the premium. It is typically taken out of your paycheck.
WHAT IS THE AFFORDABLE CARE ACT?
The Affordable Care Act is a comprehensive healthcare reform law enacted in 2010 to:
- Make health insurance more affordable and available to all
- Support care delivery methods that reduce the overall cost of healthcare
- Expand the Medicaid program (insurance for people with limited income and resources)
The ACA created the Health Insurance Marketplace® to help people find and buy health insurance. Certain states have also developed their own state-based marketplaces. There, you can compare insurance plans, benefits, and prices from different insurers.
WHAT ARE THE ACA REQUIREMENTS FOR EMPLOYERS?
The ACA created guidelines about which companies must offer health insurance.
- Employers with 50 or more full-time employees (or an equivalent number of part-time employees) must offer health insurance meeting designated standards to at least 95% of their full-time workers.
- Companies that don’t comply must pay a penalty tax.
Companies with fewer than 50 full-time employees (or the part-time employee equivalent) can choose to offer health insurance coverage. They may even qualify for tax credits to help cover their costs.
WHAT IS ACA REPORTING?
Employers that offer coverage to their employees must participate in ACA reporting. This involves submitting forms to the Internal Revenue Service (IRS). The forms prove the company provides affordable and minimum essential health coverage to its full-time employees.
WHAT ARE MY OPTIONS IF MY COMPANY DOESN’T OFFER HEALTH INSURANCE?
Health insurance coverage is helpful to shield yourself from costly treatments for illnesses or injuries. You still have options if your company doesn’t offer it or you aren’t employed. You can:
- Purchase your insurance through HealthCare.gov. or state-based marketplace, as applicable
- Purchase insurance outside of the health insurance marketplace. These plans are called “off-exchange.” They are available directly from insurance companies, through licensed brokers and online.
- See if you qualify for public/government-sponsored insurance.
- Secure coverage through a spouse, domestic partner, or parent’s employer (if you’re under age 26).
Contact one of our brokers to explore your insurance options — no matter your situation.
CAN I KEEP MY EMPLOYER-SPONSORED INSURANCE IF I QUIT OR GET FIRED?
Continuation of health coverage standards set by COBRA and certain state laws let people keep their employer-sponsored health plan if they leave their company.
Here’s an example:
Samantha is one of the 2% of employees her company laid off unexpectedly. She relied on her employer for her health insurance — now that’s not an option.
Instead of going without insurance, Samantha has the option to sign up for COBRA. With this program, she still has access to the same insurance she had with her employer (for a limited time).
Unfortunately, COBRA coverage premiums can be far more expensive than the premium Samantha paid every month. This is most likely because her employer paid for a portion of her premium. However, Samantha knows paying the higher premium is worth the peace of mind for her health insurance coverage.
COBRA applies to employers with at least 20 employees. Some states have mini-COBRA laws that are similar to COBRA that apply to employers with fewer than 20 employees. Check with your company’s human resources team.
LOOKING FOR HEALTH INSURANCE? WE CAN HELP
Select Health strives to offer our members high-quality healthcare at the lowest possible cost. No matter your individual circumstances, you have health insurance options.
Browse our health insurance plan options to find a plan that fits your needs.