Many employees in New Jersey and Pennsylvania rely on their employer-provided health insurance to help them to pay for their medical care needs. Since medical care is very expensive in the U.S., employer-provided health insurance is a prized benefit among employees. Many employers offer benefits packages that include health, dental, and vision insurance to attract and keep employees. While these benefits are popular, they are largely voluntary. This means that not all employers are required to offer medical insurance. The attorneys at Swartz Swidler can help you to understand the requirements that your employer might need to follow.
The Affordable Care Act and employer-sponsored insurance
While the Affordable Care Act does not include a mandate for employers to offer health insurance to their employers, it did impose penalties on employers with 50 or more full-time workers that fail to offer health insurance. Under the ACA, larger employers that failed to provide health insurance to 95% of the full-time employees would have to pay a penalty to the IRS. The penalty was large and could be more than $3,000 for each employee. This provided a large incentive for employers to offer health insurance. The ACA did not give employees the right to demand health insurance, however.
Under the ACA, employer-provided health insurance complied if it met the minimum requirements for affordability and coverage. The coverage was also required to be offered to the employees’ dependents.
In 2017, the Tax Cuts and Jobs Act was passed by Congress and signed into law by the president. This law rescinded the individual mandate to have health insurance that met the requirements of the ACA, which means that people who fail to get insurance no longer have to pay a penalty to the IRS. It also means that large companies that fail to provide insurance to their employees may no longer have to pay a penalty to the IRS as well. However, there are still incentives for employers to provide health insurance to their employees, including the following:
- Attract and retain workers
- Ability to claim the health-care tax credit for smaller employers with up to 25 full-time workers
- Better job satisfaction and employee morale
Smaller employers may qualify for the health-care tax credit if they have no more than 25 employees who earn an average salary of $50,000 or less. The employers must also pay a minimum of half of the premiums for their employees and purchase a plan through the marketplace or a partner of the marketplace.
Offering health insurance voluntarily
Even though they are not required to do so under the law, many companies choose to offer health insurance to their employees. According to the Urban Institute, 83.1% of workers in the U.S. were offered employer-sponsored health insurance in 2016. This means that it is likely that your employer will offer health insurance to you, but it is legal for your employer not to offer it if it chooses.
Situations when employers are required to offer health insurance
While most employers are not required to offer health insurance to their employees, there are some exceptions. For example, if you have a written employment contract that states that your employer will provide health insurance to you, your employer must provide it. Most workers in the U.S. are at-will employees without written or oral employment contracts. However, if health insurance has been promised to you in a contract, your employer must provide it. Similarly, if you are a union worker with a collective bargaining agreement that guarantees health insurance, your employer must provide it.
The Health Insurance Portability and Accountability Act or HIPAA mandates employers that offer group health plans to offer it to all similarly-situated employees. Employers are allowed to only offer group health insurance to full-time workers or workers based on their length of services or job positions. However, people within each of those groups must all be treated in the same way.
If your employer only offers health insurance to certain groups while refusing to offer it to members of certain protected classes, it can amount to illegal discrimination. Employers are prohibited from discriminating against their employees based on religion, genetic information, pregnancy, disability, age, national origin, gender, color, or race. For example, it is illegal for employers to refuse to cover women if they do cover men.
Health insurance continuation laws
If you have group health insurance through your employer, you can continue your coverage once you leave your job under the Consolidated Omnibus Budget Reconciliation Act or COBRA. This law requires employers that have 20 employees or more to allow their employees to continue their health coverage. The employees who choose to continue the coverage must pay for it out of their own pockets, however. If you are fired, quit, or are laid off, you can continue your health coverage if you can afford to pay the full premium amount.
Contact Swartz Swidler
Employer-sponsored health insurance is a great benefit for employees. It is not illegal for your employer to refuse to offer insurance unless an exception applies. If your employer does not provide insurance that is called for in an employment contract or offers insurance in a discriminatory way, you may have legal rights. Contact the law firm of Swartz Swidler to schedule a consultation by calling us or by filling out our online contact form.