Employer-Sponsored Health Insurance

Employer health insurance is chosen by your employer. Your employer does the research, chooses the insurance company, and selects your plan options. Typically, your employer shares the cost of your premiums, which is the money you pay every month for your health insurance. Usually, your share of the premium will be automatically deducted from your paychecks. Employer-sponsored health plans can have many advantages, including:

  • Your employer contributes to your premiums.
  • Your employer does all the research and work choosing plan options. This can be a time-consuming and possibly confusing task if you aren’t familiar with health insurance.
  • Your medical insurance premiums are likely deducted from your pre-tax pay, which means you’re paying for your medical insurance before any federal and state taxes are deducted, lowering your taxable income.

 

Individual Health Insurance

Personal health insurance means you do the research, choose an insurance company, and select your plan. This option gives you more control over your family’s health insurance options as well.

There are a couple different ways to purchase individual health insurance. One option is to purchase a health insurance plan from the Marketplace, which is operated by the federal government. Depending on your income and household size, you may be eligible for a subsidy, which can make your health care more affordable. Marketplace plans are only available for purchase during Open Enrollment, or if you experience a qualifying event. 

Another option for getting individual health insurance is to select a private health insurance plan. Private health insurance can be purchased directly from insurance companies, or through agents, brokers, or online.

Here are some advantages of personal health insurance:

  • You have the power to choose the best company and plan to meet your needs.
  • Your health insurance isn’t tied to your job, so you can change jobs without losing coverage.
  • You can choose a plan that includes your preferred doctors and hospital.
  • If you’re eligible, you may get a subsidy from the government, making your coverage more affordable.

COBRA Insurance

The Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions amend the Employee Retirement Income Security Act, the Internal Revenue Code, and the Public Health Service Act to require group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated. COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific events. COBRA continuation coverage is often more expensive than the amount that active employees are required to pay for group health coverage, since the employer usually pays part of the cost of employees’ coverage and all that cost can be charged to individuals receiving continuation coverage.

In general, COBRA insurance covers up to 18 months post-separation from employment.  However, if a covered employee’s spouse lost coverage due to a divorce, COBRA insurance may last up to 36 months.

Monies in a Health Savings Account (HSA) can pay for COBRA insurance.  Cost of COBRA insurance is an Itemized Deduction on the federal tax return, if paid out-of-pocket and not via the HSA.

 

Still have questions? Call us at 414-727-8181.