When you start a job, one of the benefits often offered is health insurance. This is an attractive benefit because it can help you to be covered for doctor visits, prescriptions, and in the case of an accident or critical illness. You can also add family members to these plans, which ensures that they can be covered as well.
Often, employers give you choices when it comes to coverage, asking you to choose from 2-3 plan options.
However, sometimes employer plans are more expensive than a plan you can find elsewhere, giving you the option to find a new plan or keep the plan that is offered to you.
With additional plan options on the marketplace, it can be overwhelming to decide which is best.
How to qualify for an employer plan
To be eligible for a health insurance plan through your employer, your company must have at least 1-50 full-time employees who work over 30 hours per week. these employees must also be anyone other than plan owners, spouses, family members, and partners.
70% of employees must be willing to participate in this program. Some states have different requirements, but generally, this is the participation needed for an insurer to offer benefits to a company.
When an employer wants to offer their employees health insurance, participation requirements are important. This is tracked through the amount of enrollments annually during the company’s Open Enrollment Period. If the numbers do not reach the 70% participation required by employers, employees have to find coverage elsewhere.
How do employer plans work?
Each year, employees get the chance to choose a health insurance plan during your company’s Open Enrollment Period. (OEP).
Prior to this, employers work with insurance companies to compare rates for the upcoming year. It is important for employers to get a plan that is both affordable and has good coverage for their employees.
Often, these plans offer benefits like low deductibles, copays, and a wide network of providers with no referrals.
Sometimes, employers can switch coverage that is offered to employees during OEP due to financial reasons, so it depends on the budget the company has to spend on health insurance. Generally, the bigger the company, the better the benefits.
The cost of an employer plan
The cost of an employer plan is shared between you and the employer. Once you figure out who needs to be on your plan (i.e. yourself, spouse, children,) you will be given an amount that will be taken out of your paycheck. Sometimes, costs can be higher to add a spouse or children so it is important to consider cost before choosing a plan during your company’s OEP.
What to consider when choosing an employer plan
Employer plans offer similar benefits to plans that you can buy elsewhere on the marketplace or through a private insurance company. However, some of the benefits are different because they offer lower deductibles, wider networks, and more flexibility.
Typically, employers offer a few different options. One option is little to no cost taken out of your paycheck, but when you use the coverage you will have to pay higher out-of-pocket for healthcare services.
Another option is a higher premium plan that is taken out of your paycheck, but when you use the plan the out-of-pocket costs are far less.
To make this decision, it is important to consider how you will use the coverage. If you have many healthcare needs, then it can be worth opting for a healthcare plan where you pay more in premium now because it will allow you to get your care for less out of pocket. However, if that is out of your budget due to who is on the plan, choosing the plan with a lower monthly premium is still a great option, but you just have to be prepared for a higher deductible or more out-of-pocket costs for services.
Reading the fine print is important because you are locked into this plan until next year’s OEP. Often you are given benefits guides by HR and a licensed professional is there to assist you in reviewing the options, so it is worth paying attention to the presentation.
Overall, these plans can be better than a marketplace plan because they have lower out-of-pocket costs and lower deductibles. However, marketplace plans still offer the same benefits including preventative care for free and pre-existing conditions not being held against you to enroll. It all comes down to cost and benefits to make your final decision, so working with a licensed professional can be beneficial to review your options before making your final choice.
Whichever plan you choose, it is worth reviewing the benefits with a licensed professional because they can help deciper all the ben