The majority of Americans under 65 get their health insurance from an employer. But not all employers offer group health coverage. So even if you are not self employed there are various reasons why you might need to get your own health coverage in the individual / family market.
Fortunately, there are solutions available, and you might be surprised at how affordable and sturdy they are. Here are some common scenarios where you wouldn’t have access to employer-sponsored insurance – and suggestions on how you can still get affordable, comprehensive health insurance.
You work for a small company that does not offer health benefits
Although the Affordable Care Act (ACA) requires large employers to provide health coverage, nothing requires companies with fewer than 50 employees to provide coverage to their workers. Many do it anyway, but nearly half of all companies with 3 to 49 workers do not offer health benefits. (There are significant variations in this spectrum. Employers with five workers are much less likely to provide health benefits than employers with 45 workers.)
So what can you do if you work for a small business that doesn’t offer health benefits? Essentially you will need to create your own “perks package”. The good news is, you’ll be able to customize it to suit your family’s needs and budget.
We have an overview of how to choose the best health plan for your situation. And here’s a summary of some important things to keep in mind when shopping for your own health coverage:
- Premium subsidies could make your individual health insurance very affordable. In the individual comprehensive health insurance market, the premium tax credits (premium subsidies) established by the Affordable Care Act could cover a substantial portion of the monthly cost of the health plan. Depending on your income and the plan you choose, the grants may cover the full cost. And the grants are larger and more widely available than ever before, thanks to the American Rescue Plan (ARP). You can use our grant calculator to get an idea of your grant amount and read our summary of improving health coverage affordability through ARP.
- Silver plans can further reduce your insurance costs. Pay special attention to Silver plans if your household income does not exceed 250% of the poverty line (or $ 65,500 for a family of four). Income-based cost-sharing reductions will make your coverage stronger, but they’re only available if you choose a Silver plan. Cost-sharing reductions are particularly strong for incomes of up to 200% FPL – and Silver plans are now available for free at incomes of up to 150% FPL and at a much lower cost than before for income above this level.
- You can use a health savings account. If you want to contribute to a health savings account, you will need to purchase a high deductible health plan qualified by the HSA.
- Consider your provider network when comparing plans. If it is important for you to have specific physicians in the plan network or specific drugs covered by the plan, pay close attention to the provider network and formulary (list of covered drugs) for any plan you are considering. . These vary widely from diet to diet. The Federal Medicare Marketplace, HealthCare.gov, and most of the 15 state-based markets let you check which plans specific doctors and hospitals accept.
- You can purchase additional coverage. If you want additional coverage beyond major medical care, you can read more about purchasing additional benefits.
- Medicaid or CHIP may be available. Depending on your household income and where you live, Medicaid and / or CHIP may be available for at least some members of your household. These programs offer free or low cost coverage with comprehensive benefits and low out-of-pocket costs.
- The coverage gap is an issue in some states, but you may be able to avoid it. If your household income is low and you’re in one of the 11 states where there is still a gap in coverage, make sure you read this article on how to avoid the gap in coverage.
While working for a small business is a common reason people need to purchase their own coverage, there are other employment situations that do not come with an employer sponsored group health insurance offer. . So it will also be important to keep all of the above points in mind if your situation is more like one of the following scenarios, as you will still need to purchase your own cover.
You work part-time – or as an entrepreneur – and are not entitled to benefits
Even if you work alongside colleagues who are eligible for health benefits, your own professional situation may be different.
If you work less than 30 hours per week, your employer may not provide you with health benefits, regardless of the size of the business. If you are a seasonal worker, you may not be eligible for health benefits. And if you are an entrepreneur rather than an employee, the company is not required to provide you with health coverage (although there are rules in place to prevent employers from falsely classifying employees as independent contractors. ).
If any of these situations apply and you are not eligible for the group health insurance plan offered by your employer, you will need to create your own benefit package just like someone who is hardworking. self-employed or someone who works for a small business that offers no health coverage.
Your employer reimburses the premiums for coverage purchased by you
If your employer offers a QSEHRA or an ICHRA, it means that they will reimburse you a certain amount of money each month to cover some or all of the costs of a health insurance plan purchased by you. This means that you can choose from any plan available in your area, while still benefiting from an employer’s contribution to the costs.
If you are offered an EQSHE, you may also be eligible for premium tax credits in exchange, although the amount of the tax credit is reduced by the amount of your employer’s contribution.
If you are offered an ICHRA and you accept it, you will not be eligible for a bonus tax credit. But if the ICHRA benefit isn’t large enough that the self-purchased coverage is considered affordable, you can reject the ICHRA and claim a premium tax credit instead.
Regardless of the reimbursement option, you can choose the level of coverage you want and apply your health reimbursement amount to the cost. If you are happy with a low cost plan, you could end up paying very little in premium after your employer’s contribution. On the other hand, you can decide to go for a more robust plan and pay the additional premium yourself.
Another point to keep in mind: if your employer offers an ICHRA that will pay some, but not all, of the cost of an individual market plan, they may allow you to use a pre-tax pay cut to cover the part of the premium that you will have to pay yourself. But this is only available if you purchase your plan apart from the exchange. Since premium subsidies are not available if you are receiving an ICHRA benefit, there is no downside to buying off-exchange, and it will be necessary in order to take advantage of any pre-tax pay cut approach to pay your share of the premium.
(Note that pre-tax pay cuts for the employee’s portion of bonuses are not available in conjunction with AQSEH, regardless of how the health plan is purchased).
If you do not have a qualifying event, you will need to purchase an ACA Health Plan during open registration
If your employer does not offer coverage and you do not have a recent or impending qualifying life event, you will likely have to wait until registration opens to purchase your own health coverage. But it’s just around the corner; it begins nationwide on November 1 for coverage that will take effect on January 1.
And in some states, a COVID-related enrollment window is still ongoing, which would allow you to enroll in a plan even earlier, with coverage taking effect this fall.
Most of the enhancements to the American Rescue Plan grants will still be in effect for 2022, so plans selected during open enrollment will continue to be more affordable than coverage available in previous years. So if your employer does not offer coverage and you are uninsured or have a plan that is not ACA compliant, open enrollment is your opportunity to upgrade your coverage. – and it could be a lot more affordable than you think.
Louise Norris is an individual health insurance broker who has written on Medicare and health reform since 2006. She has written dozens of opinion pieces and educational articles on the Affordable Care Act for healthinsurance .org. His updates on the state health market are regularly cited by media covering health reform and other health insurance experts.