Jane Dotson
Health insurance is a highly sought-after benefit for employees, and many employers offer health insurance to their employees as part of a benefits package. However, there is no federal law that requires small companies to offer health insurance coverage. Under the ACA, employers with 50 or more full-time employees must provide health insurance to 95% of their full-time employees or pay a penalty to the IRS. Employees can choose to accept or reject their employer's health insurance and purchase an individual plan if they feel that the group coverage does not meet their needs. If an employee already has a Marketplace plan and gets an offer of health insurance through a job, they may no longer qualify for savings on their Marketplace plan.
| Characteristics | Values |
|---|---|
| Do I have to accept my job's medical insurance? | It's optional to accept health insurance through your employer. You can deny or waive this benefit and get health insurance on your own. |
| What if I lose my job-based insurance? | You qualify for a special open enrollment of 60 days. You may need to provide proof that you lost health insurance through your job. |
| What if I want to change my insurance plan? | You can find an individual plan through the Healthcare.gov marketplace, directly from a private health insurance company, or through another source, such as Medicare or Medicaid. |
| What if my employer doesn't offer insurance? | No federal law requires small companies to offer health insurance coverage. However, under the ACA, employers with 50 or more full-time employees must provide health insurance to 95% of their full-time employees or pay a penalty to the IRS. |
| What if I need specific medical services or providers? | You can ask for the benefits paperwork and check to see if your needs are covered. You can also direct any questions related to specific coverage to the plan administrator. |
| What if I'm offered a QSEHRA or ICHRA? | This means your employer will reimburse you a certain amount of money each month to cover some or all of the cost of a self-purchased health insurance plan. With either option, you can choose the level of coverage you want. |
| What if I have a Marketplace plan and get an offer of job-based insurance? | You may no longer qualify for savings on your Marketplace plan even if you don't accept the job-based coverage offer. |
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What You'll Learn
- You don't have to accept it, but you may lose savings on a Marketplace plan
- If you have specific medical needs, ask for the benefits paperwork
- Employers with 50+ full-time employees must provide insurance to 95% of full-time staff
- If you lose your job, you qualify for a special open enrollment of 60 days
- If your employer offers a QSEHRA or ICHRA, they will reimburse you for some or all of the cost of a self-purchased plan
You don't have to accept it, but you may lose savings on a Marketplace plan
You are not required to accept your employer's medical insurance. You can deny or waive this benefit and get health insurance on your own. However, it's important to consider the potential impact on your finances if you decide to do so. If you have a Marketplace plan and receive an offer of health insurance from your employer, you may no longer be eligible for savings on your Marketplace plan, even if you don't accept the job-based coverage. This is because, in 2025, a job-based health plan will be considered "affordable" if your share of the monthly premium in the lowest-cost plan offered by your employer is less than 9.02% of your household income. Therefore, if you already have a Marketplace plan and are considering a job offer that includes health insurance, it is essential to update your Marketplace application to understand how this offer might affect your savings.
If you decide to decline your employer's medical insurance, you have several options for obtaining alternative coverage. You can purchase an individual plan through the Healthcare.gov marketplace, directly from a private health insurance company, or through other sources such as Medicare or Medicaid. Additionally, if your employer is offering a QSEHRA or ICHRA, they will reimburse you a certain amount each month to cover some or all of the costs of a self-purchased health insurance plan. This allows you to choose the level of coverage you want while still benefiting from your employer's contribution.
It's worth noting that, under the Affordable Care Act (ACA), employers with 50 or more full-time employees must provide health insurance to 95% of their full-time employees or pay a penalty to the IRS. However, this does not give employees the right to demand healthcare under the ACA. Additionally, employer-sponsored plans must cover at least 60% of medical expenses for a "standard population," with the employee paying the remaining 40% through deductibles, coinsurance, and copayments. Therefore, it is essential to carefully consider your options and review the specifics of your employer's plan before making a decision.
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If you have specific medical needs, ask for the benefits paperwork
If you have specific medical needs, it is important to ask for the benefits paperwork before deciding whether to accept your job's medical insurance. This is because different insurance plans cover different medications and doctors, so you will need to review the details of the plan to ensure that your specific needs are met.
The benefits paperwork will outline the specific medications and treatments that are covered by the plan, as well as any exclusions or limitations. For example, some plans may cover dental and vision care, while others may not. Additionally, you will want to pay close attention to the provider network, which can vary significantly between plans. If having specific doctors included in your plan's network is important to you, you will need to carefully review the provider network details in the benefits paperwork.
By reviewing the benefits paperwork, you can make an informed decision about whether your job's medical insurance plan is the right choice for you. If the plan does not adequately cover your specific medical needs, you may want to consider alternative options, such as purchasing supplemental benefits or exploring other insurance plans through the Health Insurance Marketplace.
It is also worth noting that if you have a Marketplace plan and are offered health insurance through your job, you may no longer qualify for savings on your Marketplace plan, even if you do not accept the job-based coverage. Therefore, it is important to carefully consider your options and review the financial implications before making a decision.
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Employers with 50+ full-time employees must provide insurance to 95% of full-time staff
In the United States, employers offering job-based health insurance need to ensure that it is considered "affordable" and meets a minimum standard of coverage. As per the Affordable Care Act (ACA), employers with 50 or more full-time employees (or full-time equivalents) must offer health insurance to 95% of their full-time staff and their children until the end of the month in which they turn 26. If an employer fails to do so, they are subject to penalties.
The definition of "affordable" varies slightly year on year, but in 2024, coverage is considered "affordable" if employee contributions for employee-only coverage do not exceed 8.39% of an employee's household income. In 2025, this figure will increase to 9.02%.
If an employer offers a QSEHRA or ICHRA, they will reimburse a certain amount each month to cover some or all of the costs of a self-purchased health insurance plan. This allows employees to select any available plan in their area while still benefiting from their employer's contribution.
If an employee has a written or oral employment contract that guarantees health insurance, the employer must uphold this promise. Similarly, union employees whose collective bargaining agreement guarantees health care are also entitled to this benefit.
It is important to note that employees do not have the right to demand health care under the ACA. However, if you have a job offer with health insurance, you may no longer qualify for savings on your Marketplace plan, even if you do not accept the job-based coverage.
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If you lose your job, you qualify for a special open enrollment of 60 days
Losing your job is stressful, and you may be worried about losing your health insurance along with it. If you lose your job-based health insurance, you can enroll in a Marketplace plan. You will qualify for a Special Enrollment Period of 60 days to enroll and get coverage for the rest of the year. You need to apply for Marketplace coverage within 60 days of losing your job-based coverage, and your new coverage can start the first day of the month after you lose your job-based insurance.
When you apply for coverage in the Marketplace, you will find out if you qualify for a tax credit to lower your monthly insurance payment (called your "premium") when you enroll in a plan through the Health Insurance Marketplace. Your tax credit is based on the income estimate and household information you put on your Marketplace application. You may also qualify for extra savings on Marketplace coverage based on your income when you get covered services.
If you have a Marketplace plan and get an offer of health insurance through a new job, you may no longer qualify for savings on your Marketplace plan even if you don't accept the job-based coverage offer. If you already accepted the offer of job-based insurance, you may want to cancel your Marketplace plan for yourself and anyone else in your household eligible for the new job-based coverage. You won't qualify for savings if you're enrolled in a job-based plan.
If your employer is offering a QSEHRA or ICHRA, they will reimburse you a certain amount of money each month to cover some or all of the cost of a self-purchased health insurance plan. This allows you to choose the level of coverage you want and apply the health reimbursement amount to the cost. With a QSEHRA, you may also be eligible for premium tax credits, although the amount of the tax credit would be reduced by the amount that your employer contributes. If you're offered an ICHRA, you won't be eligible for a premium tax credit, but if the benefit isn't enough to make the self-purchased coverage affordable, you can reject the ICHRA and apply for a premium tax credit instead.
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If your employer offers a QSEHRA or ICHRA, they will reimburse you for some or all of the cost of a self-purchased plan
If your employer offers a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) or an Individual Coverage Health Reimbursement Arrangement (ICHRA), they will reimburse you for some or all of the cost of a self-purchased health insurance plan. This means that you can select any available plan in your area and still benefit from your employer's contribution. With a QSEHRA, your employer can only reimburse you up to a certain limit, and you may be eligible for premium tax credits. However, the amount of tax credit will be reduced by the amount your employer contributes. On the other hand, ICHRAs have no reimbursement limits, and employers of any size can use them. If you accept an ICHRA, you won't be eligible for a premium tax credit. However, if the ICHRA benefit isn't enough to make the self-purchased coverage affordable, you can reject it and apply for a premium tax credit instead.
QSEHRAs are available to small employers, generally those with less than 50 employees, who don't offer a group health plan. These employers can contribute to their employees' healthcare costs by providing non-taxed reimbursements for certain healthcare expenses, like health insurance premiums and coinsurance. Small employers can set up a QSEHRA at any time and must provide written notice to new employees as soon as they're eligible.
ICHRA is a newer option, first introduced in 2020, that allows employers to reimburse employees with pre-tax dollars for the cost of individual health insurance premiums and qualified medical expenses. Employers determine the reimbursement amount, and there is no yearly limit. ICHRAs can be used by employers of any size and are often a more affordable option than group health insurance. However, employers cannot offer both a group health plan and an ICHRA to the same class of employees.
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Frequently asked questions
No, it is optional to accept health insurance through your employer. You can deny or waive this benefit and get health insurance on your own.
You can find an individual plan through the Healthcare.gov marketplace, directly from a private health insurance company, or through another source, such as Medicare or Medicaid.
You may no longer qualify for savings on your Marketplace plan even if you don't accept the job-based coverage offer.
You can ask for the benefits paperwork, check to see if your needs are covered, and then direct any questions related to specific coverage to the plan administrator. You can also consider purchasing additional coverage.
