How do the Health Insurance Marketplaces impact those with insurance? This is a common question from employers and employees. The answer depends on what type of insurance you have.
Generally speaking, there are three types of insurance:
Employer-sponsored health insurance plan: If you have employer-sponsored health insurance (also called group health insurance), your employer selected and purchased coverage and offers you a plan, or choice of plans. You likely share the cost of the premium with your employer. This is currently most common type of insurance coverage in the US.
Individual health insurance plan: If you have an individual health insurance plan, you purchased the plan directly, either through a broker, online, or from an insurance company. If your employer offers a stand-alone HRA, or pure defined contribution health plan, you may have an individual health insurance plan that you receive reimbursement for.
Government health insurance plan: If you have a government health insurance plan, you may be covered under Medicaid, Medicare, or another government-sponsored health plan.
Here's how employees with each of these types of health insurance are impacted by the Health Insurance Marketplaces.
Employees with Employer-Sponsored Health Insurance
If you have health insurance provided by your employer that is affordable and considered qualified, you don’t need to do anything. You'll likely continue coverage under the employer-sponsored insurance in 2014.
However, starting in 2014 if the premium you pay is not considered "affordable", then you may be eligible for a discount on an individual health insurance plan through your state Marketplace.
How do you know if your policy is “affordable?” If you are paying more than 9.5% of your household income toward your insurance premiums for employee-only coverage, then you may be eligible for financial assistance through your state Health Insurance Marketplace to reduce the amount you pay toward your health insurance premium.
For example, if you earn $30,000/year and are paying more than $2,850/year ($237/month) toward premiums for the employee-only plan, you could be eligible for the health insurance premium subsidies through your state Health Insurance Marketplace. In this example, coverage purchased through the Marketplace would be capped at about $210/month with the health insurance subsidies applied.
Employees with Individual Health Insurance
If you bought health insurance on your own, through what is known as the individual market, then you have a new option in 2014 to purchase health insurance through your state Health Insurance Marketplace. Depending on your income and family size, you may be eligible for the health insurance premium subsidies.
You will continue to have a choice as to where you purchase individual health insurance (ie you are not required to purchase coverage through the Marketplace). However, the health insurance premium subsidies (discounts) will only be available for health insurance purchased through the Marketplace.
Employees with Government Health Insurance
Employees covered under government health insurance are likely unaffected by the Marketplaces.
Those enrolled in Medicaid can keep their Medicaid coverage. And in many states, eligibility for Medicaid is expanding and more people may be eligible under Medicaid expansion.
- Those enrolled in Medicare (age 65 or older), can also keep their coverage.
Employers to Notify Employees of Marketplace Options by October 1
Employers are required to provide employees notification of their options with the Marketplaces by October 1, 2013. The Department of Labor has provided guidance on what the notification needs to include. See: Employer ACA Marketplace Notice Requirements.
What questions do you have about how employees with insurance may be impacted by the Health Insurance Marketplaces? Let us know in the comments below.