Everything you need to know about employee health insurance
- What is employee health insurance?
- What are the minimum eligibility requirements?
- The 6 top employee health insurance benefits
- What is an FSA?
- What is an HSA?
- What is the difference between an HMO and a PPO?
- How much does employee health insurance cost?
- Do employers have to offer health insurance?
- What is the Affordable Care Act?
In the U.S., 71% of private industry workers and 89% of state and local government workers are eligible for health insurance.
Health care costs can quickly add up, and if you get caught without insurance, you could be left with long-term debt.
A benefits package gives you peace of mind and protects you in the event of a health emergency or illness. The right policy will cover you and your dependents for a range of services, including medical, dental, and vision.
Not all employee health insurance options are the same. Your premiums can vary, and you may have different plans to choose from.
If you want to make the most of employee benefits, you need to know what to look for.
Keep reading to learn about the ins and outs of employee health insurance.
What is employee health insurance?
When you get a job, your employer may offer you a range of benefits. Health insurance is at the top of the benefit wishlist for most employees.
Business owners will choose an insurance company and decide which plans to offer employees. These are called group plans, and employers often receive a discount, making health insurance more affordable.
Most of the time, it's a cost-sharing arrangement. If you're eligible, you may need to pay a percentage of the premiums, as well as any copayments and deductibles.
But your employer will share the group coverage discount with you.
And your health insurance premiums will be reduced to about 17% if you're single or 27% if you have a family.
Most insurance companies have a minimum percentage of employees that need to sign up for the group health plan. It's normally around 70% but can vary between insurers.
What does your employer get from this arrangement? If your employer signs up for a group health insurance plan, they may be eligible for tax credits. And they'll have a healthier team with higher retention rates.
What are the minimum eligibility requirements?
Your eligibility for your company's health care policy will depend on how many hours you work and your location.
Full-time employees usually get coverage options, but part-time employees can miss out. A full-time employee works more than 30 hours per week continuously.
Even if you're an eligible employee, it doesn't mean you have to enroll in the program. While it can be beneficial, you may prefer to take out individual health insurance or be on your spouse’s plan instead.
You should always read the fine print before deciding if an insurance policy is right for you.
The 6 top employee health insurance benefits
If your employer offers health insurance coverage, here's a list of the benefits it may cover:
1. Medical coverage
Your health care insurance policy will come with basic medical coverage for you and your dependents.
Plans and deductibles can vary, but you can expect to get reduced-cost medical services by contributing to your monthly premiums.
Medical coverage usually includes preventative medicine such as health screenings, mental health support, visits to your physician, and referrals. You can get covered for treatments and devices for temporary illness, chronic illness, or disease.
You can expect your health coverage to give you financial protection in an emergency. If you have an accident or an unexpected health issue, you'll get reduced-cost, life-saving treatment.
Some policies include ambulance cover in the event of an emergency. You may also be able to use your medical coverage for immunizations.
Unlike individual health insurance, you cannot be excluded if you have a pre-existing condition.
Depending on the insurance company, you could save even more money by using an in-network provider.
2. Dental insurance
Another perk often included in your health care premium costs is dental insurance, which is separate from your other medical coverage.
Regular checkups and preventative treatments will keep your teeth healthy over time, but dentistry can be expensive. If you're eligible, you may have different dental insurance plans to choose from.
You can expect coverage for dentist visits, cleanings, fillings, and treatments for gum disease. Extras may include x-rays, crowns, and dentures.
The plan may also come with advanced dental treatments, such as orthodontics. If you have a young family, this coverage can be invaluable.
If you use a dentist from the insurance company's preferred provider list, your copays may be reduced.
3. Vision insurance
It's not uncommon for a health benefits package to come with a supplemental plan for vision insurance. If you’re eligible, the plan will cover your whole family.
Vision insurance can be used for eye examinations. And it can lower the cost of eyeglasses and contact lenses. Some vision insurance plans cover laser eye surgery, but you may need to pay a higher monthly premium.
You can usually reduce your out-of-pocket expenses by visiting an optometrist in the insurer's preferred provider network.
Eye exams can cost up to $200, and the average cost of eyeglasses is $196. With health insurance, these fees can be significantly reduced.
4. Prescription drugs
Your health insurance policy will usually include prescription drugs. If you're covered, the insurer will have a list of medications that are offered at a low cost.
You should be able to claim your benefit on retail pharmacy and home delivery services.
Keep in mind, some insurers ask you to pay the full amount upfront, and then you can put in a claim for reimbursement.
The approved list of drugs may be generic. You may miss out on benefits for expensive specialty medications or drugs for rare conditions.
If you're already taking medication that's not on the list, you may still get a discount. Or you may be able to speak with your doctor about switching to a similar alternative that's covered by insurance.
Even if you don't already take prescription drugs, there may be times in the future when you or your dependents need vital medicine. If this happens, you'll be glad to have prescription drug coverage.
5. Wellness programs
Sometimes, a company's human resources department will give employees access to wellness programs. Or, the health insurance company may offer wellness services to you.
These programs can help you lead a healthier lifestyle and reduce the risk of adverse health outcomes. Participation is optional, but your enrollment can come with additional perks. For example, you could get a discount on your premium, a free gym membership, access to wellness apps, or financial incentives.
But, what is a wellness program? They focus on preventative health. For example, there may be a program to help you quit smoking or reduce your alcohol consumption. And, you may have access to a weight management program, an in-house nutritionist, and diabetes support.
Some companies offer free health screenings, including blood tests and blood pressure checks. These may be done at a pop-up clinic or at your local physician.
6. Pregnancy and childbirth
Are you planning to grow your family? Since the federal government introduced the Affordable Care Act, any health insurance plan needs to cover pregnancy and childbirth services. Even if you're already pregnant, the insurer cannot deny you coverage.
If you're eligible for this benefit, you'll get health care coverage for doctor's visits, screenings and tests, and prescription drugs. Plus, any hospital and specialist fees can be reduced. Once you've had your child, you'll usually be able to access baby care and lactation services.
But there may be some limitations. For example, you may need to choose providers from the insurer's network to receive the greatest discount.
Your obstetrician could be in the network, but other specialists such as anesthetists and surgeons may not be. If you can, check with your pregnancy care team to make sure you're covered.
If you're not eligible for employee health insurance, you may be able to access an insurance plan via the government.
What is an FSA?
FSA stands for Flexible Spending Account or Flexible Spending Arrangement. You can use this account to set aside pre-tax dollars for unexpected health expenses.
You can choose how much money to put into this account, but there will be a limit.
At the start of the year, you'll decide how much to contribute each pay cycle. You'll be able to use your predicted FSA yearly total to cover your health care expenses at any time.
Your FSA can cover a range of expenses, including prescription medications, insulin, copayments, and deductibles. Your FSA can't be used to cover your insurance premiums.
If you have any unused funds in your FSA at the end of the year, the money may be lost. Some companies give you a limited time extension or a rollover of up to $500.
What is an HSA?
HSA stands for Health Savings Account, and it's similar to an FSA. You can contribute pre-income tax dollars into the account for unexpected health expenses, including copays and deductibles. And you can't use your funds to pay for your premiums.
But to be eligible for an HSA, you need to have a high-deductible health plan (HDHP). This is a plan with lower monthly premiums and higher deductibles when compared to traditional insurance options.
You can only use money that's in your account, and at the end of the year, any unused money in your HSA will roll over.
You can't use a Flexible Spending Account and a Health Savings Account simultaneously.
Depending on the company, there may be options to invest with the HSA.
What is the difference between an HMO and a PPO?
Your health insurance may come with options. Some plans are HMOs, while others are PPOs.
What does this mean?
HMO stands for Health Maintenance Organization. If you have this type of health insurance, you'll need to choose health care services from in-network providers.
If you want to make a specialist’s appointment, you'll need to visit a physician first for a referral.
PPO stands for Preferred Provider Organization. When you choose this option, you can see any health professional. They don't need to be in the insurer’s network.
If you already have a physician or a health care team, you can continue to see them. And if you want to visit a specialist, you don't need a referral.
HMOs are usually more affordable than PPOs.
How much does employee health insurance cost?
The cost of health insurance premiums can vary. Your location, your employer, and your role can all have an impact on how much you pay.
If you have a family, the average cost for yearly premiums is $21,342. Fortunately, most employers cover around 73% of this sum.
If you're a low-income earner and not eligible for an employee health insurance plan, you may be able to access Medicaid, a federal and state program that makes health care more affordable.
Do employers have to offer health insurance?
There's no law that says all employers have to offer health insurance to their employees.
But in the U.S., large companies with over 50 full-time team members can be penalized if they don't offer health insurance.
If more than 5% of team members don't have employee health insurance, the company will need to pay a financial penalty. This money goes to the IRS.
What is the Affordable Care Act?
Since 2010, the Affordable Care Act (ACA) has given additional benefits to U.S. citizens.
The ACA has opened up health care coverage to those who couldn't previously access insurance.
More people can get Medicaid, and the Health Insurance Marketplace means insurers can't discriminate based on pre-existing conditions.
Every plan now has to include basic coverage with essential health care services.
If you lose your benefits due to job loss, the Consolidated Omnibus Budget Reconciliation Act (COBRA) can give you an extra layer of protection. You can continue to receive group health benefits for a limited amount of time.
Getting employee health insurance
If you’re eligible for employee health insurance, you can save a significant amount of money.
Your employer will cover a large percentage of the premiums, but you’ll still usually need to pay the difference.
There are many health insurance benefits you may receive, including medical coverage, dental insurance, vision insurance, prescription drugs, and wellness programs. Plus, you’ll get access to pregnancy and childbirth services.
If you’re worried about unexpected health expenses, an FSA or HSA can help you set money aside in case of an emergency.
If you need more information, you can visit healthcare.gov.
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