Considering group health insurance?
If your employer group has offered you health insurance coverage, you want to know you’re making the right choice before you enroll. You may be moving from a parent or spouse's policy or from your own Health Insurance Marketplace® plan. Or, perhaps this is the first time an employer has offered you group coverage. Read on for answers to some of the most-asked questions about employer-sponsored health insurance.
Q: What is employer-sponsored health insurance?
Employer-sponsored health insurance, also known as group insurance, is health insurance coverage an employer provides to its employees and their dependents. The employer chooses and finances the health plan choices and benefits, and the employees usually pay a portion of the premium costs. About 60 percent of Americans under 65 get insurance through their employer, instead of purchasing it on their own.
Q: How is employer-sponsored health care different from individual insurance?
Individual plans are bought for individuals or families, typically through the Health Insurance Marketplace, also known as HealthCare.gov or the Affordable Care Act (ACA). You may work with an insurance agent to find a plan for you. Individual insurance is not tied to your job or your employment, so you can keep your coverage regardless of where you work.
Q: What are the advantages of enrolling in my employer’s health plan?
The major advantage of group insurance is that your employer will pay for part or all of the premium. Because your premiums are deducted from your pre-tax pay, there are tax advantages that reduce your overall taxable income. Additionally, your employer's plan(s) may have extra benefits at a lower cost than you'd see on the Marketplace.
Q: What is more expensive: Employer-sponsored or individual insurance?
This depends on a number of factors. But usually, group health insurance is less expensive than purchasing individual health insurance. That’s because if you have an offer for employer-based coverage, you likely won’t qualify for a premium tax credit through the Marketplace. The only way you’ll qualify for savings on a Marketplace plan is if your employer’s insurance doesn’t meet minimum standards for affordability and coverage. Most job-based plans meet these standards.
Q: Can my employer see my health insurance claims?
HIPAA laws prohibit employers from accessing your health or medical information, including insurance claims, unless you have provided written permission. Employers are allowed to monitor health insurance utilization. So, while your employer can see the amount of claims being charged, they do not have access to the details of your health information.
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Q: Do I have to enroll in my employer’s health coverage?
No, you don’t have to enroll in your employer's health plan. You always have the option to opt out and get health coverage on your own. However, if you are offered employer health insurance that meets all the ACA requirements, you will have to pay full price for individual health insurance.
Q: Are employers required to offer health insurance to all of their employees?
It is mandatory for employers with more than 50 full-time employees to offer health insurance plans to their employees. Small businesses with fewer than 50 full-time employees are not required to offer health insurance. This is because it’s cost-prohibitive for some smaller-sized businesses to provide coverage.
To make it more cost effective, some smaller employers limit coverage to certain categories of employees. One common approach, for example, is to offer coverage only to full-time employees (according to Healthcare.gov, a full-time employee works at least 30 hours per week, 120 days per year). As a general rule, if health coverage is offered to any full-time employee, it must be offered to all full-time employees.
Q: Is my employer required to offer health insurance to dependents?
Employer groups are not required to offer health insurance to dependents of eligible employees. An employer may choose to provide employee-only coverage or extend coverage to spouses and children. When an eligible employee is enrolled, dependents are usually eligible for coverage. The Affordable Care Act requires employers who cover dependents to extend coverage until age 26.
Q: Can I be denied coverage for a pre-existing condition?
You cannot be denied coverage for a pre-existing condition (a health problem you had before the date your new health coverage starts). Health insurance companies cannot refuse coverage or charge you more if you have a pre-existing condition.