What is Employer-Sponsored Health Insurance?
An employer-sponsored health insurance plan is group health coverage for employees. It is available to all employees defined under a group. Employee health insurance plan is essentially any health coverage that is paid by the company.
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-The risks attributing to the insurance plan is distributed to the entire group and keeps the premium low than terms of individual plans. The premiums are also low for employee health insurance coverage because, as per the Affordable Care Act or the ACA, the premiums cannot exceed a certain fixed percentage of household income of the employees. This number currently is at 9.5% as per the ACA. This means after the employee contributes to the plan, the premium cannot be more than 9.5% of your household income. The 9.5% applies to your individual coverage and not for your dependents included in the plan.
-The cost of employer-sponsored insurance is also low for employees as the premium or part of the premium is paid by the employer.
-Another feature of group health insurance is that these group plans are more comprehensive than individual plans. Other than the basic coverage, it can also include accidental coverage, as well as dental and other benefits. Often, individual plans don’t offer any additional coverage such as for pre-existing health problems.
-Employee health insurance deduction is another feature of this type of group insurance. The premium paid for by the employer can be tax-free based on the coverage.
-The company is liable to pay a penalty if the group coverage is not affordable for all employees. If even one employee buys the insurance policy outside the group plan, the government can levy a fine. The amount of fine may depend on the total number of employees.
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Employee health insurance plans offer benefits to not only the employees but even to the company.
The benefits to businesses –
- Employee health insurance management can seem alike big cost to companies. But employer-sponsored plans act as a big incentive for employees. Through group plans, you not only help your employees get good health insurance coverage, you also help them save money on a premium amount. When you face two job offers – one with a health plan and the other without – it is easy to know which one you will prefer over the other.
- Health insurance plans can be very expensive. When you help your employees save money by offering group insurance, it can act as an incentive. When you offer it to your employees as a perk, it can help you find and retain employees. The cost of insurance can act as a good investment in the long run, as you can save a ton of money by retaining employees for years.
- Group health insurance plans help companies save money on taxes. Small business owners can save even more money by participating in group health plans.
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The benefits to employees –
Group insurance plans are a win-win for both the employer and the employees.
- Finding good health coverage that is affordable yet comprehensive is difficult as it also can be expensive. Employees can appreciate the perk of employer-sponsored health plans as it can make them tension-free to find a good health cover as well as cut costs on paying the premium.
- Depending on the Employee health insurance coverage, employees can save a lot on their health costs annually. If you are someone who needs to see a doctor regularly due to pre-existing conditions, you may want a long lasting insurance plan. Some plans like PPO or a ‘preferred provider plan’ offers the flexibility of seeking treatment outside of the network. So, if your employee health insurance plan is suitable for you, it can help you save money on your health bill.
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If you are someone applying for a new job, you should carefully evaluate the health plan offered to you by your company. Group health insurance is a perk for every employee, so, you must make use of it wisely.