Employer-provided health insurance is a valuable benefit for many workers, but it’s essential to know when your employer is legally required to offer it. While some employers voluntarily provide comprehensive benefits, others might not be obligated to do so. Understanding the laws around employer-sponsored health insurance can help you make informed decisions about your coverage options.
Employer-Provided Health Insurance: What Are the Basics?
Many employers offer health insurance to attract and retain employees, but not all are required to do so. Generally, whether your employer must provide health coverage depends on the size of the company and specific employment laws. Let’s explore the key aspects of employer-sponsored health insurance.
Large Employers and the Affordable Care Act (ACA) Requirements
The Affordable Care Act (ACA) has specific rules for large employers. If a company has 50 or more full-time employees, it’s considered a large employer under the ACA. In this case, the employer must offer health insurance to full-time workers or face potential penalties. The ACA’s “employer mandate” means large employers must provide affordable and minimum-value health coverage to at least 95% of full-time employees.
While the penalty for not offering coverage was initially a significant incentive for compliance, recent changes to tax laws have altered enforcement. However, many large employers continue to offer health insurance to avoid penalties and maintain a competitive edge in recruiting talent.
Small Businesses: Are They Required to Offer Health Insurance?
Small businesses with fewer than 50 full-time employees are not subject to the ACA’s employer mandate. This means they are not legally required to provide health insurance. However, many small employers choose to offer health benefits to remain competitive and attract skilled workers.
For small businesses interested in providing coverage, the Small Business Health Options Program (SHOP) offers plans that may be eligible for tax credits. Employers who meet certain criteria, such as paying at least 50% of employee premiums and having 25 or fewer employees, can benefit from these credits.
Union Contracts and Written Agreements
Employers might be required to provide health insurance if there’s a collective bargaining agreement or employment contract in place. Unionized employees often negotiate health benefits as part of their employment terms. If you work under such an agreement, your employer must adhere to the health insurance provisions outlined in the contract.
Similarly, if your employment contract includes a clause guaranteeing health insurance, your employer must fulfill this obligation. If they fail to do so, you might have grounds for legal action.
Discrimination and Health Insurance Coverage
Employers who offer health insurance must comply with non-discrimination laws. They cannot deny health coverage based on race, age, gender, disability, religion, or other protected characteristics. If you believe your employer is discriminating in how they provide health benefits, it may be a violation of your rights.
For instance, if an employer offers health insurance to male employees but not to female employees, it’s considered discriminatory. If you face such an issue, you may want to learn more about Discrimination in the Workplace.
Health Insurance Continuation Rights Under COBRA
Even if your employer is not obligated to provide health insurance, you might still have options to continue coverage if you lose your job. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees to maintain their health insurance for a limited period after leaving their job. This law applies to employers with 20 or more employees. However, you’ll be responsible for the entire premium plus an administrative fee.
New Jersey’s Mini-COBRA law offers similar protections for smaller employers with fewer than 20 employees, ensuring that you can temporarily continue coverage. If you recently left your job and need more information about health insurance continuation, check out our article on Rights to Health Care After Job Loss.
Employer Health Plans and HIPAA Protections
The Health Insurance Portability and Accountability Act (HIPAA) plays a significant role in regulating employer-sponsored health insurance. Employers offering group health plans must comply with HIPAA’s protections, ensuring coverage is available to all eligible employees without discrimination. This means employers cannot refuse coverage to employees based on health status, medical history, or genetic information.
Tax Credits for Small Employers Offering Health Insurance
Smaller employers offering health insurance might be eligible for a health care tax credit. To qualify, the employer must pay at least 50% of employee premiums and have fewer than 25 full-time employees earning an average salary of $50,000 or less. This incentive encourages smaller businesses to offer health benefits, even if they’re not legally required to do so.
Options for Employees Without Employer-Provided Health Insurance
If your employer doesn’t offer health insurance, you still have options to secure coverage. You can explore plans on the NJ health insurance marketplace or consider Medicaid if you qualify. For those who recently lost their job, COBRA might be a temporary solution, even if you have to pay the premiums yourself.
When Should You Seek Legal Help?
If you suspect your employer is not complying with health insurance laws, discriminating in providing benefits, or failing to honor contractual obligations, it’s crucial to seek legal guidance. At Swartz Swidler, we can help you navigate the complexities of employment law and protect your rights.
For more information on your rights as an employee, read our guide on What Rights Do You Have as an Employee.
Final Thoughts
Understanding your rights regarding employer-provided health insurance is essential. While not all employers are required to offer health coverage, those who do must follow specific rules. If you’re facing challenges with your health benefits or have questions about your employer’s obligations, reach out to Swartz Swidler for assistance.
By staying informed about your rights and options, you can make the best decisions for your health care needs. Contact Swartz Swidler today for a consultation and let us help you protect your rights.
