How Not Offering Employees Health Insurance Is The Best Thing You Can Do For Them

Woman holding a $100 billWhile not offering affordable health insurance or not offering it at all may seem like a negative point for companies, some employees may actually be better off in this situation under the Affordable Care Act, also known as Obamacare.

"Our analysis suggests that employees and employers across the country should sit down and discuss the potential merits of discontinuing employer-sponsored plans," the price comparison site ValuePenguin.com said in a recently-published report. "The company would end up saving money while the employee would benefit from thousands of dollars in tax subsidies—a clear win-win for both parties."

Affordable Coverage

Under President Barack Obama’s signature healthcare law, if a company offers subsidized health insurance that costs less than or equal to 9.5 percent of their income – they are being offered “affordable coverage.”

Workers offered so-called affordable coverage cannot reject it and buy insurance through the state-run exchanges. However, this affordability test does not pertain to the entire family. So, if the cost of the offered coverage for an employee’s family, including any employer subsidies, exceeds 9.5 percent of family income – the family is NOT eligible to reject employer-subsidized insurance and seek a better government-subsidized deal through the exchange.

In this case the family would either have to take the pricy employers plan, or have the employee get insurance through their employer and cover the rest of the family through a plan from the state exchange, possibly without government subsidies. In some cases, both of these choices may not be financially feasible. So ultimately, an employee with a family to cover may be better off if his or her employer dropped coverage and allowed them to seek a government-subsidized plan.

Are Employers and Their Workers Better Off?

These plans may also be more attractive for individuals as well. According to Abir Sen, president and co-founder of health-plan selection company Gravie, Obamacare plans might be a better deal for everyone involved.

“Individual plans can be 20 to 30 percent cheaper than comparable group plans," Sen recently told Inc.

Shopping for individual plans also offers the consumer more options in choosing a provider network. With the federal government offering subsidies to individuals and families whose income is less than 400 percent of the poverty level, dropping coverage might be a decision that workers will thank their employers for making.

Health-Life-Dental-Insurance has representatives available for businesses thinking about making a significant change to their coverage plans to dropping their coverage all together. We also provides a range of coverage options for both groups and individuals. Call us today to see how much we can save employers and employees: 1-800-257-1723.

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