Employers offer many types of health coverage options such as: group insurance, Health Reimbursement Accounts (HRAs), supplemental plans, flex spending accounts to use with a health plan, or COBRA.
With all of this variety, you might wonder if you should enroll in your employer plan, or shop with Covered California instead. In most cases, your employer's offer is your best bet. In fact, if your employer offer is considered affordable and minimum value by federal standards, you won’t qualify for financial help with a Covered California plan. Browse this section to learn more about employer coverage and whether you qualify for financial help.
Employer Group Coverage
Many employers or employee associations offer health insurance to their employees. In fact, the Affordable Care Act requires employers with more than 50 full-time equivalent employees to offer health coverage that meets certain minimum requirements. Smaller employers may offer insurance too.
Employer-sponsored health insurance is selected and purchased by your employer and offered to eligible employees and their dependents.
Advantages of an employer plan:
Your employer does all of the work choosing the plan options.
Your employer often splits the cost of premiums with you.
Your portion of the premium may be automatically deducted from your paycheck each pay period.
Premium contributions from your employer are not subject to federal taxes, and your contributions can be made pre-tax, which lowers your taxable income.
Your employer provides policy documents and answers questions about your plan.
Employer-sponsored health insurance is different from the kind of policy you buy with Covered California. Employer-sponsored insurance is often a group plan – a group of employees who are insured together under an employer policy. Covered California, on the other hand, sells individual insurance – a policy that you purchase just for yourself or your family.
Advantages of an individual plan:
You can choose the insurance company, the plan and the options that meet your needs.
You can renew or change health insurance plans, options and health insurance companies during the annual Open Enrollment period.
Your plan is not tied to your job, so you can change jobs without losing your coverage.
You can choose a plan that includes the doctors and hospitals you trust.
You may be eligible for federal or state financial help to pay for your insurance.
In most cases, if you’re eligible for employer-sponsored insurance, you aren’t eligible for financial help to buy a health plan through Covered California.
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires most employers with group health insurance plans to offer their employees the opportunity to continue their health coverage under their employer's plan even after they have been terminated or laid off or had another change in their employment status.
Employer Coverage and Financial Help
Employees who are offered health coverage by their employer that is affordable and that meets minimum value standards are not eligible for financial help to help pay premiums for an individual Covered California health plan. You can buy a Covered California health plan, but you will have to pay the full cost without tax credits. If your employer offers you affordable and minimum value coverage, but you turn it down, sign up for an individual plan through Covered California, and receive financial help to pay for that plan, you may have to pay back some or all of the tax credits or subsidy you received when you file your state and federal taxes.
What is affordable and minimum value coverage?
Most health plans offered by employers are affordable and offer minimum value.
A health plan meets minimum value requirements if it is designed to pay at least 60 percent of the total cost of medical services for a standard population and includes substantial coverage of inpatient hospital and physician services. In other words, it must at least be equivalent to a Bronze plan.
Employer insurance is considered affordable if your share of the premium for the lowest-priced plan available to cover you — not your family — is 9.83 percent for 2021 or less of your household income.
This might mean that you, the employee, have access to affordable and minimum value employer coverage, but it may not include coverage for your family. What are your options?
If the lowest-cost employer-sponsored family plan that covers all of your dependents is more than 8.27 percent of your household income:
You may qualify for an exemption to avoid the state tax penalty if you go without insurance.
You may qualify to purchase a catastrophic plan with a high deductible.
Children under 19 may qualify for Medi-Cal or CCHIP (County Child Health Insurance Program), depending on household income.
Consider purchasing a full-priced individual or family plan for your spouse and children.
Get more information about affordable coverage and minimum-value coverage by calling us at (800) 650-0922 today.