Do Employers Have To Provide Health Insurance?

With a rise in health care costs all over the world, more and more employees are seeking health insurance plans as part of their job benefits. And rightly so, with the average uninsured emergency room visit costing between $500 to $1000.

In the backdrop of these rising health care costs, employees prefer health coverage over extra pay by the employer. At the same time, employers understand the increase in employee productivity and retention a good health insurance plan can provide.

Do Employers Have To Provide Health Insurance?

Employers are required to provide health insurance based on a number of conditions. Firstly, only companies with fifty or more full-time employees are required to provide health care insurance to their employees, according to the Affordable Care Act (ACA). The ACA, commonly known as Obamacare, came into effect in 2014, and from 1st January 2015, all employers that fulfilled the 50+ full-time employee condition were subject to penalties, usually in the form of taxes, if they failed to provide insurance.

For smaller businesses, the ACA liability does not hold. According to the standards maintained by ACA, a small business is one that has less than fifty employees. Though small businesses do not face any penalties for not providing their employees with health care, they generally tend to do so to receive a tax credit from the government.

Does An Employer Have To Offer Health Insurance To All Employees?

Despite the penalties put in place by the ACA, employers have a choice on who they may provide health care coverage for. Most employers choose to provide health care to groups of employees that may be in a similar position. For example, only all the senior members of the company, or all the salaried employees, or employees on certain job positions, or only full-time employees may receive health care benefits.

Though companies have a right to choose who they offer health benefits to, it is mandatory to have the selection criteria applied uniformly across the company. This means that all employees in similar positions must be offered the same benefits. So whatever criteria the company follows for grouping for health insurance, all employees that fulfil that criteria are eligible for the same health benefits.

To answer if an employer has to offer health insurance to all employees, no they may not. They can choose which group of their workforce they may want to provide this benefit for, as long as they cover 95% of their full-time employees.

What Percent Of Health Insurance Are Employers Required To Pay?

On average, an employer is required to pay up to at least sixty per cent of an individual’s health insurance plan. Companies hoping to attract top talent may go for an even higher percentage, touching the eighty per cent mark. On the other hand, smaller companies or companies facing financial hardships may lower the percentage of coverage they provide to up to fifty per cent.

According to the 2019 Employer Health Benefits Survey published by Kaiser Family Foundation, a not for profit organisation focused on researching and documenting major health care issues in the USA, the amount of individual health insurance that was covered by employers in 2019 was, on average, eighty-two per cent. For family health benefits, this amount reached seventy per cent. For smaller firms, the employer covered eighty-three to eighty-four per cent of the individual insurance plan and sixty to seventy-four per cent of family coverage plans.

Can An Employer Require You To Have Health Insurance?

Your employer can require you to have health insurance, regardless of whether you want to have it or not. The only underlying condition is that the employee should not be paying more than 9.5 per cent of the premium and that the insurance plan should finance almost sixty per cent of the total health coverage, on average. The employee can only decline the health insurance provided by their boss if it does not meet the minimum requirements mentioned above.

Can I Refuse My Employers Health Insurance?

Sometimes, your employer plan may not be the best one for you. In this case, declining the health plan offered by your employer may prove to save more money for you. Declining your employer’s health plan is called a waiver of coverage. Before you opt for a waiver of coverage, you may need to consider a few things.

When should you opt for a waiver of coverage?

When should you refuse the health insurance plan provided by your employer? A few alternative options may cause you to opt for a waiver of coverage from your company’s insurance plan. Make sure you consider all available options carefully before going down this road.

  1. A family member’s plan adequately covers your health insurance.
  2. You have another employer who is covering your health insurance plan. This can be for example if you qualify for COBRA.
  3. You already have a more affordable, better health care plan that is a lot less expensive than the one offered by your company.
  4. The family coverage your employer is providing is too expensive for you.
  5. You are not satisfied with your employer’s plan. This is the tricky part and you should be extra careful when coming to this decision. If you try to go for getting an insurance plan on the marketplace, you may have to face higher costs if your employer’s plan met minimum requirements. You may also not be offered premium tax credits in this case.

Most importantly, you should only deny your employer’s health insurance after going through all options available to you. This is not a decision to make hastily – you might end up paying more out of your pocket.

Employer Failed To Provide Health Insurance

There are two ways to see this, Firstly, when you join a company, your employer is not obligated to provide you with healthcare. This can be because you do not qualify as part of the group that your employee is offering the employment to or are not at the position of seniority to be eligible for one. In this case, there is little you can do.

The second scenario is when your employment letter or employment offer states that you will receive certain health benefits but after joining the company, your employer fails to provide you with health insurance. If this happens, the first thing to do is to contact your supervisor and your human resource department and apprise them of the situation. The best way to do this is via email or a written letter, as opposed to an oral inquiry.

If you still fail to receive health benefits even after this, you have the option to sue your company. You will need to consult an attorney for this. Sometimes, the damages are not worth the hassle and you may want to consider continuing with the job. If however, you took the job partly because of the health benefits it had to offer, you can go for this option. You may choose to remain working while you sue, though this seldom happens, or you may leave the job and sue for damages incurred as unemployment as well.

Nabeel Ahmad

Nabeel Ahmad

Nabeel Ahmad is the founder and editor-in-chief of Insurance Noon. Apart from Insurance Noon, he is a serial entrepreneur, and has founded multiple successful companies in different industries.

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