Employer Health Insurance: What is It & is My Employer Required to Offer?

Employer Health Insurance: What is It & is My Employer Required to Offer?

Employer health insurance is a benefit offered by your employer to cover a portion of your health care costs. Many times, health insurance within a company or organization is less expensive than buying a plan individually because the employer pays for a large portion of your monthly premium. In this article, we evaluate what employer health insurance is and who is required to offer it. 

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Not All Employers Are Required to Provide Health Insurance

Employers aren’t necessarily required to provide health insurance in the United States if they classify as a smaller business. The requirements fall in line with the number of employees a business has, and some state laws might change the requirements, depending on where you live. 

Dr. Kate Tulenko, a health workforce expert at Corvus Health, explains why employers are not required to provide health insurance for their employees; 

“The Affordable Care Act (ACA) does require large employers (50 or more full-time employees) to provide health insurance to 95% of their workers or pay a fine. The health insurance provided must meet certain affordability requirements and must cover a minimum set of essential services. Whether individuals have to pay a penalty if they do not have health insurance depends on their state of residence and is in flux due to lawsuits challenging the ACA”.

Group Health Insurance vs. Employer Health Insurance

Group health insurance is an insurance plan that covers a group of people who are employees of a company or part of an organization. The employer purchases the plan and employees are often given a small discount. Although it is not required to be on your employer's group plan, many people choose to be covered by group insurance for several reasons.

Group Insurance Explained 

Generally, there are three types of health plans your employer may offer: HMO (Health M