If my employer offers health insurance to its employee, is it required to offer this benefit to all employees?

It sounds unusual to some people that any employer would try to offer health insurance to certain employees of their company and not others, but it has actually happened many times. Thus, the need to regulate it ensued. Sometimes an employer may feel generous, but only toward their friends. In other cases, it might be that they’re inclined to offer it to long time employees, but not those who have only joined the company in recent years. Regardless of the reasons, it’s not legal.

That being said, there are rules that govern who an employer must offer insurance coverage to. When the Affordable Care Act was put into action in 2012, it stipulated that employers must offer group health insurance coverage to all employees who work 30 hours or more each week. For the purpose of health insurance, these employees are considered full time workers.

There are certain circumstances in which an employer is exempt from this ruling though. If they have fewer than 50 employees, for example, they don’t have to offer health insurance. Considering how many small businesses exist in this nation that employ less than 50 people, that’s a large number who aren’t eligible for employer provided insurance. However, those businesses are often able to take advantage of plans through the Small Business Health Options marketplace if they choose. This isn’t a requirement.

Among those employers who are required to provide it, many began to preemptively weed the flock before the ACA rule even went into effect. They strategically plucked employees who were already working for them on a full time basis and reduced their hours enough to make them part time employees, per health insurance regulations. This would then exempt them from having to offer coverage to as many employees. This has become the norm in many industries. Employers would rather hire more workers who are part time employees and pay less for health insurance coverage than hire more employees and pay more to give them insurance. Unfortunately, regulating this aspect of the healthcare loophole has proved to be quite difficult.

In a nutshell, employers cannot offer health insurance to one employee and not another by their specific choosing, but they don’t have to offer it to part time employees when they’re providing it to full time employees, though some may choose to.

 

Cite this page: Danielle Bosley, "If my employer offers health insurance to its employee, is it required to offer this benefit to all employees?," in PsychologyDictionary.org, April 5, 2016, https://psychologydictionary.org/article/if-my-employer-offers-health-insurance-to-its-employee-is-it-required-to-offer-this-benefit-to-all-employees/ (accessed July 21, 2019).
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