If your employer offers health insurance, that doesn’t necessarily mean you have to buy it. Employees can choose to leave an employer-sponsored group plan in favor of Obamacare – the health insurance market. Do you know your best option? Each one has its pros and cons.
What Are the Advantages of Employer-Sponsored Health Insurance?
- In most cases, workplace health insurance is less costly than an individual plan. Under federal law, large employers are required to pay at least half of their employees’ health insurance premiums, and many businesses exceed that percentage.
- You pay your share of an employer-sponsored plan with pre-tax dollars, which can save you money.
- In recent years, employer-sponsored health insurance plans have increased only moderately in cost, which is not true of individual health plans.
- Workplace health plans may offer health care savings accounts and other perks not found with individual health plans.
Why Would You Want Out of a Workplace Health Plan?
In certain situations, you may be better off opting out of work-sponsored group insurance and buying health insurance on your own. For example, you may want to buy an individual plan if:
- Your employer offers health insurance but does not contribute to the premiums. Not all employers are required to help pay for health insurance premiums, and not all of them do. When they do, the amount they cover can vary. If workplace health insurance is too costly, you may be better off buying health insurance on your own.
- Your employer offers health insurance, but it is not a good plan. For example, your deductibles and co-pays are too high, or the plan excludes drugs and services you need.
- Your employer is offering a plan you can’t afford.
- Dependent care for your spouse and children under the employer-sponsored plan is prohibitively expensive.
- You are losing your job and offered COBRA. Under COBRA law, you have the right to continue with your health insurance plan after you leave your job, but your employer is no longer required to subsidize any of your premiums.
Things to Consider before Choosing a Marketplace Plan
- If you opt out of job-based health insurance, your employer is not required to contribute to your marketplace plan premiums.
- If your work-sponsored plan is deemed affordable, you will not be eligible for a premium tax credit for your marketplace plan, even if you would have qualified otherwise.
- You can only enroll in an individual health insurance plan during open enrollment.
- You will not qualify for government subsidy on marketplace coverage if you opted out of an employer-sponsored plan that meets minimum value standards under the Affordable Care Act, even if you would otherwise qualified based on your income.
Get Professional Help with Your Decision
Health insurance is more confusing than ever. If you need help deciding on your best option, our experienced agency will be happy to help. We can review your options with you and help you determine which is the best health insurance plan in terms of both coverage and costs.