Most Americans under the age of 65 get their health insurance from an employer. But not all employers offer group health coverage. So even if you’re not self-employed, there are a variety of reasons you may need to get your own health coverage in the individual/family market.
Fortunately, solutions are available and you may be surprised at how affordable and robust they are. Here are some common scenarios where you wouldn’t have access to employer-sponsored insurance, and tips on how you can get affordable, comprehensive health insurance.
you work for a small company that doesn’t offer health benefits
Although the Affordable Care Act (ACA) requires large employers to offer health coverage, there is no requirement that companies with fewer than 50 employees offer coverage to their workers. . many do anyway, but nearly half of all businesses with 3 to 49 workers don’t offer health benefits. (There is significant variation across that spectrum. Employers with five workers are much less likely to offer health benefits than employers with 45 workers.)
So what can you do if you work for a small business that doesn’t offer health benefits? you will essentially need to create your own “benefit package”. The good news is that you can customize it to fit your family’s needs and budget.
We have an overview of how to choose the best health plan for your circumstances. And here’s a rundown of some important things to keep in mind when shopping for your own health coverage:
- Premium subsidies could make your individual health insurance very affordable. In the comprehensive individual health insurance market, established premium tax credits (premium subsidies) by the Affordable Care Act they could pay a substantial part of the monthly cost of the health plan. Depending on your income and the plan you select, subsidies may cover the full cost. And the subsidies are bigger and more available than ever before, thanks to the US bailout plan (ARP). You can use our subsidy calculator to get an idea of how much your subsidy could be and read our summary of the improved affordability of health coverage as a result of the ARP.
- silver plans can further reduce your insurance costs. pay special attention to silver plans if your household income is less than 250% of the poverty level (that’s $66,250 for a family of four enrolling in coverage for 2022). Cost-sharing reductions based on income will make your coverage stronger, but are only available if you choose a silver plan. Cost-sharing reductions are particularly strong at incomes up to 200% FPL, and silver plans are now available for free at incomes up to 150% FPL and at a much lower cost than before at incomes above that level.
- You can use a health savings account. If you’re interested in contributing to a health savings account, you’ll need to purchase an HSA-qualified high-deductible health plan.
- Consider your provider network when comparing plans. If it is important to you to have specific doctors in the plan’s network, or specific drugs covered by the plan, pay special attention to the provider network and to the formulary (list of covered drugs) of any plan you are considering. These vary considerably from plan to plan. The federal health insurance marketplace, healthcare.gov, and most of the 15 state marketplaces let you check which plans accept specific doctors and hospitals.
- You can purchase additional coverage. If you want additional coverage beyond major medical expenses, you can learn more about purchasing supplemental benefits.
- Medicaid or chip may be available. Depending on your household income and where you live, Medicaid and/or chip may be available to at least some members of your household. These programs provide free or low-cost coverage with comprehensive benefits and low out-of-pocket costs.
- The coverage gap is a problem in some states, but you may be able to avoid it. If your household income is low and you are in one of the 11 states where coverage is still available gap, make sure you’ve read this article on how to avoid the coverage gap.
While working for a small business is a common reason people need to purchase their own coverage, there are other work situations that don’t come with an offer of employer-sponsored group health benefits. therefore, it will also be important to keep all of the above points in mind if your situation more closely resembles one of the following scenarios, as you will still need to purchase your own coverage.
works part-time, or as a contractor, and doesn’t qualify for benefits
Although you may be working alongside co-workers who qualify for health benefits, your own employment situation may be different.
If you work less than 30 hours a week, your employer may not offer you health benefits, regardless of the size of the company. If you are a seasonal worker, you may not qualify for health benefits. and if you’re a contractor rather than an employee, the company isn’t required to offer you health coverage (although there are rules to prevent employers from misclassifying employees as independent contractors).
If any of these situations apply and you are not eligible for the group health plan provided by your employer, you will need to create your own benefits package, just like someone who is self-employed or someone who works for a small business It does not offer any health coverage.
your employer reimburses premiums for self-purchased coverage
If your employer offers a qsehra or ichra, it means your employer will reimburse you a certain amount of money each month to cover some or all of the cost of a self-purchased health insurance plan. This means you can choose from any plan available in your area, and still get the benefit of an employer’s contribution to cover the cost.
If you are offered a qsehra, you may also be eligible for premium tax credits in the exchange, although the amount of the tax credit would be reduced by the amount contributed by your employer.
If you are offered an ichra and accept it, you will not be eligible for a premium tax credit. But if the ichra benefit isn’t substantial enough for self-purchased coverage to be considered affordable, you can decline the ichra and claim a premium tax credit instead.
With any of the reimbursement options, you can choose the level of coverage you want and apply the amount of your health reimbursement to the cost. If you’re happy with a low-cost plan, you may end up paying very little in premiums after your employer’s contribution. on the other hand, you may decide to choose a stronger plan and pay the additional premium yourself.
Another point to note: If your employer offers an ichra that will pay some, but not all, of the cost of an individual market plan, they may allow you to use a pre-tax salary reduction to cover the portion. of the premium that you will have to pay yourself. but this is only available if you buy your plan outside of the exchange. Since premium subsidies are not available if you are receiving an ichra benefit, there is no harm in buying off-market and you will need to take advantage of any pre-tax salary reduction approaches to pay your portion of the premium.
(Note that pre-tax salary reductions for the employee portion of premiums are not available in conjunction with qsehras, regardless of how the health plan is purchased.)
if you don’t have a qualifying event, you’ll need to purchase a health plan here during open enrollment
If your employer doesn’t offer coverage and you don’t have a recent or impending qualifying life event, you may have to wait until enrollment opens to sign up for your own health coverage. runs from November 1 to January 15 in most states. If you were uninsured or reliant on a non-compliant plan, open enrollment is your chance to upgrade your coverage, and it could be much more affordable than you thought.
However, Native Americans can enroll in year-round coverage through the marketplace/exchange. Medicaid/Chip enrollment is also available year-round for those who are eligible. There is also a special enrollment opportunity in 2022 for people who are eligible for premium subsidies and whose family income does not exceed 150% of the poverty level.
Most US bailout subsidy enhancements remain in place for 2022, so plans selected during a special enrollment period in 2022 remain more affordable than coverage available in previous years.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinion pieces and educational articles on the Affordable Care Act for healthinsurance.org. Ella’s updates from the state health market are regularly cited by the media covering health reform and by other health insurance experts.