In the United States, people pay a premium for health care. Without a good insurance plan, sickness and injury can be financially devastating. As a result, health insurance is one of the most important parts of any employer benefits package. In fact, many employers use health insurance as a way to attract, and keep, employees. But are employers legally required to provide health insurance? The short answer is no.
Affordable Care Act
In general, employers are not forced by law to provide coverage for health care to their employees. That being said, larger employers may be penalized for failing to do so. The Affordable Care Act (ACA) imposes penalties on employers with at least 50 full-time employees that do not provide coverage for 95 percent of those employees. Under ACA, these employers must pay a penalty of $3,860 per employee if they don’t meet ACA’s requirements. Even so, ACA does not give employees the right to demand coverage; if the employer is willing to pay the per-employee fee, it has no legal obligation to provide health insurance.
To determine whether an employee is full time for the purpose of ACA’s health insurance requirements, full-time status applies to any employee who works a minimum of 30 hours per week, or 130 hours per month, during a calendar month.
In addition to the employee, ACA requires the employer-sponsored health insurance plan to extend to his or her children under the age of 26 or pay the penalty. Spouses, stepchildren, and foster children are not considered dependents and are therefore excluded from this ACA requirement. An experienced employment law attorney can help you determine how to proceed if you feel that your employer has failed to provide you with the required coverage.
Small employers have even less obligation to offer coverage. Due to increasing insurance costs, it is becoming less and less common for small employers to provide benefit plans. But some small employers do offer coverage as a voluntary benefit.
In 2018, employer-based health insurance remained the most common source of private health insurance coverage, with 55.1 percent of all workers receiving insurance through their employer. These statistics reveal that while employers have no legal obligation to offer coverage to employees, the American employee is more likely than not to have access to health insurance through his or her employer.
Exceptions to the Rule
As with most things in life, there are some exceptions to the “no legal obligation” rule when it comes to employer-sponsored health insurance. Here are a few examples:
- If your employment contract specifically gave you the right to health insurance, your employer must uphold this promise.
- Union employees, who are guaranteed health care in a collective bargaining agreement, must receive these benefits.
- When all other employees in your employment classification (full-time status, position, geographic location, etc.) are offered health insurance, you must receive the same offer.
- If health insurance is being offered on a discriminatory basis (only to employees of a certain age, race, gender, or religion, for example), you may have a workplace discrimination claim based on protections within Title VII of the Civil Rights Act.
Generally speaking, the ACA holds that if an employer offers health insurance to employees, it must offer coverage to all eligible employees as soon as they become eligible. Employers who choose to go this route are subjected to a 90-day maximum waiting period, after which insurance must be provided to all eligible employees.
The Individual Mandate
Making things even more complicated for employers and employees is the ACA’s “individual mandate”, which requires the majority of Americans to have minimum health insurance coverage. Individuals without proof of health insurance were previously assessed penalties by the IRS when they filed taxes, but Congress repealed this penalty. Even so, the requirement to have coverage still stands.
According to NYC-based Steven M. Warshawsky, Esq. of The Warshawsky Law Firm, employers, regardless of size, are not required to offer health insurance to their employees, and the so-called “individual mandate” applies to individuals, not employers. This is true regardless of whether the mandate is under federal or state law.
“But if employers do decide to offer health insurance,” says Warshawsky, “then they will be subject to federal, state, and local laws regarding the types of benefits that must be provided and their obligation to maintain coverage in various situations.”
Contact an Experienced Employment Law Attorney Today
If you believe that your employer has failed to provide required health coverage due to discrimination, your employment classification, or because an employment contract guaranteed you this right, an experienced employment law attorney can help. Legal issues surrounding employee benefits constitute an extremely complex, and constantly evolving area of law, and it is in your best interest to obtain legal counsel if you believe your rights have been violated in any way.