As a consumer, you may have the option to choose between a health insurance plan offered by your employer or one provided by your spouse’s company, and in some cases, you can even opt for a plan that comes from the healthcare marketplace. When you are deciding, think about what you anticipate for your healthcare needs, and analyze the potential costs and benefits of your choices.
First, if you have an employer-provided plan or access to an employer-subsidized program through your partner, it may be your best bet. Many companies pay a portion of the group health insurance cost, and some pay the entire premium (at least for the employee’s coverage). Also, if your employer offers affordable coverage that meets specific minimum standards, you won’t qualify for a premium tax credit or discount on the coverage you get through the marketplace.
According to the Kaiser Family Foundation 2021 survey, thirty percent of small companies pay the entire premium for individual coverage for their workers (if they offer insurance), and only three percent pay less than half the cost. With large companies, only five percent pay the entire expense, but almost eighty percent pay more than twenty-five percent. Likewise, the contributions for family coverage are typically less, although nearly a third of small firms pay the entire cost for that coverage (compared to five percent of all companies.)
To meet the definition of “affordable,” the employer’s plan must cost the worker less than 9.61 percent of the employee’s household income. However, the rule only applies to employee coverage without considering what it costs for dependents to be included. So, if an employee earns $50,000, the affordability threshold is approximately $4,805 for that individual to participate in the workforce plan. Even if the dependent coverage costs twice as much, the family would not be eligible for marketplace participation because only the worker’s premium counts for the affordable definition. According to the Kaiser Family Foundation, over five million people are adversely affected by this so-called “family glitch.” Health care advocates hope that the Biden administration will take administrative action to remedy the problem, but there are no imminent signs of a solution.
The employer coverage must also meet specific minimum essential standards. The two indicators are:
If you aren’t sure your employer-provided plan meets the minimum standards, ask for the information requested in this coverage tool.
Implementation of the ACA (Affordable Care Act) health insurance marketplace for consumers was mainly left up to the individual states. As a result, approaches vary. Twenty-four states use the HealthCare.gov platform and customer service call center. Fourteen states and the district of Columbia have completely individual, state-run marketplace (like Covered California, Vermont Health Connect, and GetCoveredNJ). Six states have a state market but rely on the federal platform for enrollment, and another six partner with the federal program for support. Any consumer in any state can start by checking the HealthCare.gov site, which will direct you to the appropriate resource for your state of residence.
All plans sold by the marketplace meet the required benefits that comprise the minimum essential standards for an employer plan and offer at least the ten essential health benefits as defined by the ACA:
While every plan will have coverage for all these broad service areas, the level of coverage will vary between states and between plans. The programs are categorized by reference to a metal tier—bronze, silver, gold, and platinum, based on how much the plan costs and what it covers. For example, platinum typically costs the most and covers the most. Each tier may offer a different deductible, co-payment, and out-of-pocket maximum in addition to a separate premium. For example, if you choose a bronze plan, you will probably have a lower premium but pay more if you need service. Therefore, a bronze plan might be better for someone who doesn’t anticipate heavy coverage usage. On the other hand, if you have regular care for an ongoing condition and use several prescription drugs, you may save by choosing a silver or gold plan.
The premiums, deductibles, and out-of-pocket caps will depend on your location, income, and other factors, but here is a cost-sharing breakdown by metal tier:
|Metal Tier||Insurance Company Pays||Consumer Pays|
Catastrophic care is a plan which covers very little until you satisfy an extremely high deductible (currently over $8,000 for an individual.) The eligible expenses before you pay that amount include preventive care. However, only a small number of people are permitted to enroll in a catastrophic plan. You must be under 30 years of age or eligible for a hardship designation due to financial circumstances such as bankruptcy, eviction, or foreclosure.
Choosing a specific plan depends partly on your needs and preferences and your financial circumstances. The plans fall into three distinct categories of HMO (Health Maintenance Organization), EPO (Exclusive Provider Organization), and PPO (Preferred Provider Organization). In some, you may have a broader selection of providers, while in others, you may be allowed more visits to a certain kind of service, such as a chiropractor or speech therapist. Some plans emphasize generic drugs, while others cover brand names at comparable cost levels. It’s important to consider how you will use the care when analyzing the costs of your options rather than simply comparing monthly premiums and annual deductibles.
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Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., He provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.
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