How do you get employer-sponsored health coverage?

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Employers allow you to sign up for coverage during specific time periods. These periods may be called by different names, such as initial enrollment, open enrollment, or open season. You will have a chance to sign up during the initial enrollment period, and you will also have a chance to enroll later.

If an employer offers health coverage, there are a minimum number of hours an employee is required to work in a week to become and stay eligible for benefits. Employers also usually require employees to have worked for a certain amount of time before they become eligible for benefits.

How much will employer-sponsored health coverage cost and who pays for it?

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You may be responsible for no cost, a percentage of the cost, or the amount of the cost of the coverage that is above what the employer agrees to pay.

Employers are supposed to offer plans that cost the employee, for the employee’s policy alone, less than 9.5% of the employee’s family income for the monthly premium. Also, that coverage must meet bronze-level standards for copayment, co-insurance, and deductible expenses.

There is no limit to how much it may cost to add the employee’s family members to the plan. This amount is set by employer agreements with their insurance companies. Your employer's Human Resources department or personnel staff can explain these benefit details.

How do I stay enrolled in employer-sponsored health coverage? How often do I have to reapply?

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Employers usually do not require re-enrollment in coverage. You will need to continue to work the minimum number of hours to stay eligible for benefits, called an active work requirement. During the annual open enrollment or open season you can change coverage plans.

Note: Employers may change coverage plans or coverage choices for you without your active participation. If your employer changes insurance companies, you will have to re-enroll.

Can I get coverage under my parent’s insurance?

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Yes, if you are under 26 and cannot get health coverage through your own employer. Employers who offer coverage to their employees must also offer it to their children under the age of 26.

Employers do not have to offer coverage to the spouses of employees.

How long will employer-sponsored group coverage last?

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You must meet the active work requirement, pay any portion of the premium you're responsible for, and follow the plan's rules. If you do those things, the coverage will generally last as long as you work for your employer, assuming that the employer continues to offer health coverage.

When coverage ends, you have different options:

  • You can switch to the employer-sponsored coverage of your spouse, if your spouse has it.
  • You can check out your public and private individual coverage options on Covered California.
  • You can continue on the same policy you had from your employer through COBRA. This option may be very expensive and should be viewed as a last resort.

How does employer-sponsored coverage affect my eligibility for other programs?

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If you could get affordable employer-sponsored coverage through your employer, your spouse’s employer, or your parent’s employer, you will not be able to get government help through tax subsidies to pay for an individual plan on Covered California.

You will be able to apply for Medi-Cal or buy an individual plan on Covered California, as long as you are willing to pay the full price of the premium on your own. It is possible that in some cases an individual plan on Covered California would be cheaper than getting coverage through your parent’s or spouse’s employer.

What does “affordable” mean when we talk about employer-sponsored coverage?

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Affordable in this case means that your employer, your parent’s employer, or your spouse’s employer must offer coverage for you that would cost the employee, for the employee’s policy alone, less than 9.5% of your family’s income for the monthly premium. Also, that coverage must meet bronze-level standards.

If the plan offered by the employer does not meet these standards, you may qualify for government help through tax subsidies to reduce the premium on an individual plan.

Note: The coverage your employer offers must meet affordability standards for the employee, but not for the family. It may be very expensive for family members to join an employer-sponsored health plan. Even so, anybody who could get employer-sponsored coverage, even if it is not affordable for the family member, will not qualify for tax subsidies to buy an individual plan on Covered California.

Is there any reason to have both public and private coverage?

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Yes. If you have private health coverage, or have access to it, in many cases it makes sense to enroll in both private health coverage and public coverage. With private coverage, you may have a wider pool of doctors and other medical service providers to choose from than with public coverage. However, public coverage might pay for some services that many private plans don’t cover like transportation, private-duty nursing, and Personal Care Assistant (PCA) services.

Furthermore, if you have both at the same time, Medi-Cal may decide it is cost-effective for them to pay your portion of your employer-sponsored health insurance's premium. Read about the Medi-Cal Health Insurance Premium Payment (HIPP) program in DB101’s Medi-Cal article.

What happens if I don’t get any coverage?

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It is risky not to have have coverage: you could have an accident at any time and health care is extremely expensive. By having health coverage, you can get health care when you need it.

There is no good excuse for not getting insurance. To find the right health coverage option for you, keep reading the articles in DB101’s Health Coverage section.

Note: It is very important to have health coverage, but starting in 2019 there is no tax penalty if you don't have coverage.

What is the difference between fully insured and self-insured coverage?

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Employers in California can offer either fully insured or self-insured plans. With a fully insured plan, an employer purchases insurance for its employees through an insurance company and pays premiums to that company, and the insurance company is responsible for providing the costs of health care, as agreed upon in the policy. Fully insured plans are subject to federal and state regulation.

With a self-insured (or self-funded) plans, an employer sets aside its own funds to cover the costs of employee medical expenses directly, not through an insurance company. To the employee, a self-insured plan may seem to function much like a fully insured plan. However, self-insured plans are subject to different regulations and so may not offer all of the benefits that a fully insured plan must offer.