If my employer offers insurance, do I have to take it?

Health insurance exchanges were designed primarily for those who are unemployed, self-employed, or who work for a business too small to offer insurance benefits. But while most Americans choose to receive health coverage through their employer when available, there is nothing stopping you from turning down an employer-sponsored health plan and purchasing one on or off the exchange instead.

However, opting to buy a plan through the exchange will likely cost you more than going through your employer would. If the insurance offered through your workplace meets certain requirements in terms of price and coverage, you will most likely be ineligible to receive the subsidies that help make exchange plans affordable. Most employer-sponsored insurance plans meet these requirements, as large companies have to pay penalties if the plans that they offer are sub-standard and less desirable than those on the exchange.

Without access to subsidies, you are stuck paying the entirety of a plan’s premiums yourself, whereas an employer would cover a portion of those premiums for you. On average, employers pay roughly 70% of the premiums for family health coverage for their employees. Thus, in most cases, taking the insurance plan offered through your employer will be the most economical option.

That being said, it is also worth noting that the affordability requirement for an employer-sponsored plan only takes into consideration the cost of insuring the employee themselves, and not any spouses or dependents that may also need coverage. In some cases, especially where the employer covers premiums only for the employee and not for other family members, it may be best to get coverage for yourself through your employer and then purchase a plan for the rest of the family through the exchange. Just know that the rule about being ineligible for subsidies if quality, affordable coverage is available through an employer applies to family members as well as yourself. If you are interested in getting a separate plan for your children, you may also consider the Children’s Health Insurance Program (CHIP). The program has certain income-based restrictions that vary widely from one state to another and may also have restrictions for situations where insurance is available through an employer, but it is worth looking into.

If you do find yourself in a situation where the coverage offered by your employer does not meet the requirements mentioned above, remember that in order to receive subsidies there are also requirements that you yourself must meet in terms of income, and that these subsidies can only be used on plans purchased through the exchange.

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How do I tell if I’m eligible for Medicaid or if I need to buy a plan through the exchange?

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