Employer-Sponsored Coverage for Healthcare
Employer-sponsored health coverage is a form of insurance that pays part of the total cost incurred by an employee for medically related expenses. This includes hospital stays, doctor consultations, medical equipment and prescription drugs. The employer pays for a portion or the entire premium. These are purchased by the employer from a health insurance provider at a group rate and a plan summary is provided for the employees, which outlines what the health plan covers.
When you are employed in a company that runs an employer-sponsored coverage, there will typically be an initial enrollment period where certain requirements would have to be met before the employee can be covered. These requirements may be based on the length of service and the number of hours worked weekly. Enrollment is done through open enrollment or a specific time in the year where all the other employees renew their coverage. If an employee fails to sign up when they first become eligible, the exclusionary periods for pre-existing conditions might be longer that what they normally would be.
Employees cannot be disqualified from employer-sponsored health coverage due to their medical history. There is a minimum length of hours an employee is required to work weekly to be able to obtain and maintain eligibility for health care benefits. This is also known as the active work requirement. Insurers and employers set this time period. Once the active work requirement is met, a worker may also be required to work for the company for a fixed period of time in order to become eligible to enroll for health care benefits. This is referred to as service eligibility.
There are different types of employer-sponsored health coverage including health maintenance organizations, preferred provider organizations, point of service, and indemnity plans. Employers have the option to provide one type or give their employees the option to choose from a multiple type of health plans.
While employer-sponsored health care insurance cannot be withheld from any employee, it can however decide not to provide coverage for pre-existing conditions for a fixed period of time. This is called the exclusionary period. A pre-existing condition is any kind of medical care that was recommended within 6 months prior to an employee’s enrollment to a company-sponsored health plan. Policies have a specific period of time from the start of the employee’s coverage that the policy will not cover a pre-existing medical condition. Employees can use previous coverage as credit to shorten the exclusionary period for pre-existing condition.
Prescription Drug Coverage
The prescription drug coverage will depend on the plan purchased by the employer. There are plans where the prescription coverage is embedded in the health plan while others offer a stand-alone prescription plan.
Cost of Healthcare Coverage
Employees may be covered without cost to them. They may also pay for a percentage of the cost shared with the employer. Many companies offer a tiered health care plan where employees can opt for a coverage where they need not shell out funds or pay part of the premium for a more comprehensive health care plan. This is where employees may be asked to pay copayments, coinsurance, and the insurance deductible.
As long as the employee is meeting the active work requirement and is able to pay the portion of the premium that they are responsible for, the insurance will continue to run for as long as the employee is working for the company and as long as the employer continues to offer health coverage.
There are state or federal continuation coverage protections for employees in between jobs such as the COBRA. Being eligible for Medicare will not exclude an employee from being eligible for company-sponsored health care plans. It may even work to improve your health coverage options. Employees need not re-enroll in the company-sponsored coverage annually. They can, however, change their coverage during the open enrollment period or the open season. Employers can change the coverage plans they offer or the health care insurers even if the employee did not participate in the open enrollment period.
Companies may offer dental, vision as well as long-term care coverage on top of the health coverage they provide.
Health coverage rules change periodically. The interaction of public health coverage with employer-sponsored health coverage is where rules can change often. If you are uncertain about your coverage, you can consult a benefits planner.