For many employees, Open Enrollment period for employer insurance comes in the fall, and is a short two or four week period where you have to make important decisions about health care for the coming year. This can be a lot of pressure, and so it turns out that a little preparation can go a long way. If you are a new employee at a job, you may be offered insurance right away, or after a period of 90 or 180 days.
Know your options, because if this were a relationship on Facebook, you might say, "It's Complicated!" What follows is a series of questions that will hopefully help you figure it out.
If you are going to turn down your employer insurance, you want to make sure you are clear about the alternatives. Although it doesn't matter to Medicaid if you have an offer of employer insurance, it does matter if you were hoping to get subsidies on the Marketplace. Don't turn down your offer of coverage without studying your options!
1. Does your employer coverage meet Minimum Essential Coverage guidelines?
This would mean the the employer coverage covers:
- Ambulatory patient services(Appointments and procedures in a doctor's office);
- Emergency services;
- Maternity and newborn care;
- Mental health and substance use disorder services, including behavioral health treatment;
- Prescription drugs;
- Rehabilitative and habilitative services and devices;
- Laboratory services;
- Preventive and wellness services and chronic disease management and Pediatric services, including oral and vision care.
BEWARE: Some employers offer very inexpensive medical plans that do not cover hospitalization or emergency services. These do not meet Minimum Essential Coverage guidelines.
2. Does your employer coverage meet Minimum Value standards?
Minimum value standard is a standard of minimum coverage that applies to job-based health plans. If your employer’s plan meets this standard and is considered “affordable,” you won’t be eligible for a premium tax credit if you buy a Marketplace insurance plan instead.
A health plan meets the minimum value standard if both of these apply:
- It’s designed to pay at least 60% of the total cost of medical services for a standard population
- Its benefits include substantial coverage of physician and inpatient hospital services
If you are unsure, ask your employer to fill out the Employer Coverage Tool.
NOTE: If the answer is no to EITHER the minimum essential coverage or minimum value standard, and you are income-eligible, you should be eligible for advance premium tax credits.
3. Is your family income low enough for some or all of your family to qualify for Medicaid?
Look here for the income eligibility tables for Medicaid. If you (or some members of your family) are income-eligible for Medicaid, you can apply for Medicaid instead of or in addition to your employer coverage. Because the income cutoffs for children are higher than for adults, often children can be enrolled in Medicaid or MIChild while the parents enroll in employer coverage. You can also have both Medicaid and your employer insurance--Medicaid will pay co-pays and deductibles not covered by your employer coverage, and this can be useful if you have a high-deductible plan.
4. What is the cost of your insurance, relative to your income?
To figure this out, look at the lowest-cost plan your employer is offering that meets the minimum standards (see #1 and #2 above), and the cost for the health coverage for the employee alone.
Example 1: The cost is $100/month for the employee alone, and the employee makes $1000/month. $100/$1000=10% of income.
Example 2: The cost is $100/month for the employee alone, and the employee makes $2000/month. $100/$2000=5% of income.
Generally, if the cost is more than 8% of family income but less than 9.69% of family income, you are exempt from having to take the insurance, but you are not eligible to get advance premium tax credits on the Marketplace. [You may, however, be eligible for Medicaid!]
If the cost is more than 9.69% of family income, you don't have to take your employer insurance, but you can buy on the Marketplace and qualify for advance premium tax credits.
5. What about the rest of the family? The Family Glitch
The Affordable Care Act looks primarily at affordability for the employee only. Different people in a family can get covered in different ways.
If the cost of insurance for the employee is affordable, and the cost for the rest of the family is not affordable, you fall into what is called the "family glitch." The rest of the family is probably not going to be eligible for subsidized plans on the Marketplace. At this point, help from someone familiar with insurance options can be a big help. You may very well be able to get an exemption on your taxes from having to pay a fine, but that doesn't help with getting health care. On the other hand, other family members may get covered differently. Possibilities may include:
- Medicaid (apply here)
- local health plans, like the Washtenaw Health Plan
- health care through a Federally Qualified Health Center (Packard Health) or Free Clinic (Hope Clinic in Ypsilanti)
- Charity Care programs through local hospitals
- Marketplace or other health coverage purchased at full price (this may be a reasonable cost for children).
Don't forget: in many cases, different people in a family are covered in different ways. For example, each parent may be covered by his/her own employer, and the children may be covered by MIChild.
6. What if employer coverage gets offered or dropped in the middle of the year?
Changes in employer coverage in the middle of the year create Special Enrollment Period opportunities. If employer coverage is offered, you should evaluate it. If you have Medicaid and will continue to qualify for Medicaid, you may not want to take it. If you have a Marketplace plan and the employer coverage meets minimum standards, you may need to take the employer coverage because you will no longer be eligible for APTCs. If you take it and have a Marketplace plan, make sure to let the Marketplace know!
If you lose employer coverage during the middle of the year, you may be eligible for Marketplace or Medicaid plans. The Special Enrollment Period on the Marketplace after you lose employer insurance is good for 60 days. Medicaid is open year-round.
If you have questions, call or walk in to the WHP office.
Washtenaw Health Plan, where We Help PeoplE like you!
Monday through Friday from 9am to 4pm
555 Towner, Ypsilanti, MI 48198
Employer Coverage Tool: Use this tool to gather answers about any employer health coverage that you’re eligible for (even if it’s from another person’s job, like a parent or spouse). You’ll need this information to complete your Marketplace application. Complete one tool for each employer that offers health coverage that you’re eligible for.
Healthcare.gov: Apply here for Marketplace insurance.
MiBridges: Apply here for Medicaid insurance.
HealthSherpa: Use this tool to compare health plans.