What is Employer-Sponsored Health Coverage?

Many larger employers and some smaller employers have discovered that offering a diverse benefits package can draw and keep talented, well-educated, and dedicated employees. One of the most popular benefits for many employees is employer-sponsored health coverage. Insurance may include coverage for the employee only or the employee and his or her dependents.

Employer-sponsored health plans split the cost of the premiums, with employers generally paying the majority of the amount of the premium for the employee and the employee’s dependents. The remaining premium is paid by the employee. Premiums are usually considered tax-exempt. Employees also often have the option to put pre-tax dollars into health savings accounts, which they may then spend on certain approved expenses related to health care.

Employer-sponsored group health insurance can be extremely beneficial to employees. Because it is a group-plan model, all employees have the option to participate, even those with pre-existing conditions. Risk is spread out over a large group, which often reduces the cost of premiums. The use of pre-tax dollars can also effectively reduce employees’ overall expenses as well.

Employee health insurance plans generally include traditional group plan options such as HMOs, PPOs, and POS plans. These plans may require employees to choose a medical home, or primary care physician, who will coordinate their care. In order to enjoy maximum benefits, they may be required to stay within a specific network of approved care providers and facilities. Some types of plans will provide limited coverage for out-of-network care as well.

Although employer-sponsored insurance is currently an optional benefit, it will become mandatory in 2014, thanks to the Patient Protection and Affordable Care Act. Employers who have more than 50 employees and do not offer health insurance to their full-time employees may be subject to a tax penalty.

To learn more about your options for affordable insurance, contact one of our qualified insurance professionals today.

Source: Los Angeles Health Coverage

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