Why do employers pay for health care?
Many employers offer health care options for their employees because it is in their economic best interest to do so. Unlike compensating employees through a higher salary, employers can provide health care benefits to employees as a way to make their compensation package more attractive without paying payroll taxes. Employees find health care benefits to be very lucrative because they do not pay taxes on benefits that they receive for their health care expenses.
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Employer Considerations in Offering Health Insurance to Employees
If an employer decides to offer health insurance to its employees, the employer will need to pick a provider for its health insurance. It will also need to decide the amount of coverage that it will offer to employees. There will probably be different levels of benefits that the provider will offer and the ultimate consumer will be able to choose from.
The Employee Retirement Income Security Act of 1974 (ERISA) regulates the types of benefits and coverage requirements of health insurance offered by employers. Health insurance law protects employees against employers cancelling their health care coverage or restricting their access to health care. In general, the goal of federal regulation on job-based health insurance plans is to make sure that all job-based health insurance plans meet minimum standards for coverage.
Health Insurance Through an Employer
If you are employed at a company that offers a health insurance plan, you will have to first decide whether to participate in the plan. Just because a health insurance plan is offered through your employer does not mean that you are required to participate in that particular health insurance plan.
If you do decide to participate in the health insurance plan offered by your employer, then you will need to find out the amount of the deductible that you will need to pay out of your own pocket before the coverage actually kicks in. You also need to know the amount of your co-pay and what doctors are in the network that you are able to see through your plan. You will receive an insurance card with basic information about your health insurance policy on it.
One other option that your employer may offer is a flexible spending arrangement or a health savings account, which are both tax-free options. These arrangements allow employees to direct a portion of their salary to an account that can be used for all sorts of health care needs.
What Happens if You Do Not Have Health Insurance Through Your Job
If you do not currently receive health insurance benefits through your job, then you have many options available for you to choose from. First of all, if you lose your job and find yourself without health insurance coverage because you only had it through your work, then you could keep your job-based health plan thanks to the Consolidated Omnibus Budget Reconciliation Act (COBRA). Although you will still need to pay the premium for your coverage, you will be able to extend your current health care coverage for a certain period of time.
Shopping for health insurance as an individual in the marketplace requires you to look into multiple options so that you find the right plan for you and your family. The best way to find the right health insurance coverage is to get multiple quotes and explore as many coverage options as possible.
One thing to consider in the overall cost of getting insurance through the marketplace as an individual is that you may be able to take a tax deduction for the health insurance premium that you pay.
The type of insurance plan that you choose will also depend on your age, health history and how many dependents you will need to have covered by your health insurance plan. If you have more dependents, the prices that you pay for health insurance will be higher.
Even if you have a pre-existing medical condition, you will still be able to find some form of health insurance thanks to the Affordable Health Care Act. If you engage in certain unhealthy lifestyle choices, this could lead to you paying more money for your health insurance plan.
The Final Word on Why Employers Pay for their Employees’ Health Care Benefits
In sum, there is a very good reason why so many employers willingly offer health care benefits to their employees. The tax incentives provided to both employers and employees through the federal government have made it very attractive for employers to provide healthcare benefits to their employees.
If you have any difficulty with your health insurance plan that is offered through your employer, including your coverage being denied or your employer terminating your health insurance plan, you can contact the department of insurance for your particular state.
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