What to Do If You Lose Your Employer-Sponsored Healthcare

What to Do If You Lose Your Employer-Sponsored Healthcare

More than 60% of Americans receive health insurance through their employers, but what should you do if your company stops providing coverage?

Canopy Health believes healthcare benefits improve workplace morale and productivity, but some employers feel overwhelmed by the related costs. What would happen if your employer decided to terminate its healthcare plans?

Keep reading to learn how to protect you and your family’s health and wellness.

Do California Employers Have to Offer Healthcare Coverage?

California employers do not have to offer healthcare benefits but might face tax penalties if they opt out of the healthcare system. Under the Affordable Care Act, employers with 50 or more full-time equivalent (FTE) employees must offer healthcare coverage or pay a tax penalty — $2,320 per employee in 2018. Unlike the “individual mandate” that was repealed in the Tax Cut and Jobs Act, this “pay or play” penalty was not eliminated. In comparison, the average 2018 employer-sponsored premium was $6,896 for single coverage.

However, employers have other reasons to maintain an employer-sponsored health plan. First, employer contributions to health plans are tax-deductible. Additionally, research suggests employer-sponsored healthcare improves workplace productivity and employee retention.

If your employer decides they are willing to take on these additional costs and risk losing their top talent, there’s little you can do about it. Instead, act quickly to ensure your continuity of healthcare.

Step 1: Assess Your Options

After the loss of your employer-sponsored health plan, you might be surprised at how many healthcare options you have. While your individual choices will vary depending on your household income and family structure, they might include the following sources.

Insurance Through a Family Member

If you have a spouse or another family member that has employer-sponsored healthcare, you might be able to switch to their plan. Most employer-sponsored health plans limit coverage to an employee’s spouse, domestic partner, and dependent children. However, coverage will vary from plan to plan. To confirm your eligibility for insurance through a family member, check with their healthcare plan or HR representative.

COBRA

COBRA is a federal law that gives you the chance to stay on your employer-sponsored health plan for a limited time. However, you must pay the entire premium, including the portion your company previously paid. COBRA premiums can be expensive, but you’ll maintain your existing insurance coverage. Typically, you can keep COBRA coverage for up to 18 months.

Covered California and Medi-Cal

Covered California is the state’s ACA healthcare marketplace. It offers a variety of health plans from different insurance carriers. There are four primary levels of coverage: Bronze, Silver, Gold, and Platinum. You can compare each plan’s coverage options and costs on the Covered California website.

When you apply for Covered California, you also apply for Medi-Cal, which provides free or very low-cost healthcare to low income families and individuals. If you qualify for Medi-Cal, your county’s Medi-Cal office will contact you.

Opting Out of Health Insurance

You also have the right to opt out of health insurance. In 2019, you won’t have to pay an individual tax penalty under the ACA if you decline health insurance, but uninsured Californians still face significant financial and health risks.

If you become seriously ill or injured while uninsured, you’re going to have to pay all of your medical bills out-of-pocket, and you might get charged more than insured patients. The typical hospital charges an uninsured patient 3.4 times the actual cost of care, but some hospitals might charge you up to ten times the cost of care.

Additionally, being uninsured might be bad for your health. Research suggests uninsured people delay or avoid preventive care, putting them at risk for health complications. At Canopy Health, we discourage people from opting out of health insurance.

Step 2: Shop for Healthcare Plans

Once you’ve identified your health plan options, it’s time to compare their coverage and costs. While this might seem like a daunting task, it’s not as difficult as you might think. You’ll need to collect copies of each health plan’s Summary of Benefits and Coverage (SBC). This four-page document should outline the plan’s deductibles, co-payments, and other costs in plain English. Next, carefully assess each plan’s quality and potential cost.

When you evaluate quality, look at the following factors:

  • Do your existing physicians participate in the plan?
  • Does the plan restrict you to a very narrow number of physicians?
  • Are the physicians and hospitals easily accessible from your home and workplace?
  • Do you have access to the best hospitals and medical groups in the Bay Area?

Once you understand the quality of each plan, it’s time to consider your healthcare costs.

In addition to premiums, the monthly charge you’ll pay to maintain your health plan, you should also consider:

  • Deductibles: The amount you’ll have to pay before your health plan starts to contribute
  • Co-pays and Co-Insurance: The fee or percentage you’ll have to pay for healthcare services after you meet your deductible
  • Out-Of-Pocket Maximums: Once you reach this limit, your health plan covers 100% of your care

You’ll also want to take you and your family’s anticipated healthcare needs into account. For example, if you plan on undergoing a major surgery or expanding your family, you might opt for a plan with a higher premium that offers lower co-pays and out-of-pocket costs.

Step 3: Enroll for a New Plan During the Special Enrollment Period

Typically, you must wait until Open Enrollment to sign up for a new health plan. However, losing your employer-sponsored health plan is typically a “qualifying life event” (QLE) that will make you eligible for a special enrollment period. Other QLEs include getting divorced or married, having or adopting a child, or a death in the family — among others.

If you meet one of these criteria, you typically have 60 days to sign up for a new health plan. It’s important to act quickly after losing your health plan. Sixty days can pass quickly, and you’ll need to give yourself time to assess your options and complete the enrollment process. Once the special enrollment period expires, you’ll have to wait until Open Enrollment to sign up for a new plan.

Canopy Health: Empowering Healthy Decisions in the Bay Area

While Canopy Health currently only offers employer-sponsored healthcare, we believe everyone deserves accurate and honest information about their healthcare options. If you’re interested in learning more about our refreshingly clear, human approach to Bay Area healthcare, contact us at 888-8-CANOPY or by completing this online form.

Resources

Key facts about the uninsured population. (2017, September 19). Kaiser Family Foundation. Retrieved from https://www.kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/

Sun, L (2015, June 8). 50 hospitals charge uninsured more than 10 times cost of care, study finds. The Washington Post. Retrieved from https://www.washingtonpost.com/national/health-science/why-some-hospitals-can-get-away-with-price-gouging-patients-study-finds/2015/06/08/b7f5118c-0aeb-11e5-9e39-0db921c47b93_story.html?noredirect=on&utm_term=.90fef2fe27f6