Updated June 18, 2015.
1. Employers Don’t Have to Offer Health Insurance.
If you thought the Affordable Care Act was going to force employers to offer their employees health insurance, think again. Employers do not have to offer health insurance. However, large businesses will eventually face penalties if they don’t offer health insurance to employees who work 30 hours per week or more. These penalties aren’t likely to cost as much as providing health insurance, though, so there’s a chance employers might choose to pay the tax penalty rather than provide health insurance.
Small businesses with fewer than 50 full-time employees won’t even face penalties if they don’t offer health insurance.
2. Just Because You’re Offered a Job Doesn’t Necessarily Mean You’ll Get Health Insurance.
Even if a company does offer health insurance, it doesn’t have to offer it to everyone. For example, many businesses limit the offer of health insurance to full-time workers. If you absolutely have to have a job that provides health insurance, don’t celebrate a job offer until you’ve asked whether you’ll be eligible to participate in the employee health plan.
3. Employers Only Pay Part of the Cost of Employee Health Insurance.
If you’re offered a job with health benefits, you’ll probably still be paying for health insurance. However, you won’t be bearing the full brunt of the cost of that health plan yourself. While most employers don’t pay 100% of the cost of their employees’ health benefits, most pay more than half of the cost of the monthly premiums. You’ll have the rest of the cost deducted, pre-tax, from your paycheck.
4. There’s a Waiting Period for Health Insurance.
If you get a job offer with health benefits, don’t immediately cancel your current COBRA, exchange-based health plan, or short-term health insurance policy. There’s usually a waiting period between the time you’re hired and the time your new health insurance kicks in. You’ll want to keep any existing health insurance until the day your new coverage begins, so you’ll need to budget for that ongoing expense.
5. If You’re Hired by a Large Employer, You Might Be Automatically Enrolled.
If your new employer has 200 or more employees and offers health insurance, it may automatically enroll new hires into a designated health plan. If you don’t want your new employer’s health insurance, you may need to take action to opt out of this health insurance benefit or you could wind up paying premiums you didn’t expect to be paying.
6. Employers Are Moving Toward Consumer-Directed Health Plans.
More employers are offering consumer-directed health plans like High-Deductible Health Plans partnered with a Health Savings Account or Health Reimbursement Arrangement. Since the employee has some “skin in the game” with HDHPs, these plans encourage employees to shop for the best value when they need health care, thereby helping to hold health care costs at a reasonable level.
7. Sign Up for an HSA If It’s Offered.
If you’ve had a job offer from a company that offers an HDHP paired with an HSA, sign up for the HSA. You can contribute pre-tax money from each paycheck into your HSA to help you manage the high deductible that comes with HDHPs. Some employers even contribute funds into your HSA for you.
Money taken from the HSA to pay for medical expenses isn’t taxed. Unlike an FSA, you don’t lose money remaining in the HSA at the end of the year. It stays in your HSA, growing tax-free, until you need it. You won’t lose the money in your HSA when you lose your job, either. The HSA is yours and goes with you when you leave your job.
Once you turn 65, you can take money out of your HSA for any reason without a penalty. If you use that money for non-medical expenses, you’ll pay regular income taxes on it. But, if you use it for qualified medical expenses, it will be tax free.
Learn more about HSAs in
8. You Might Be Offered an HRA Instead of an HSA
Some employers are opting to set up health reimbursement arrangements for their employees rather than HSAs. Employers put money into the HRA and you use those funds to get reimbursed for medical expenses like your deductible and copays.
9. If You’re on COBRA and Get a Job With Benefits, Your COBRA Plan Can Drop You.
If you currently have COBRA continuation coverage, your COBRA health plan has the right to cancel your coverage when you begin coverage under your new employer’s health plan. This change in insurers is likely to affect which doctors and hospitals are in-network for you. Be aware that you may need to change doctors in order to stay in-network with a new-employer’s health plan.
10. Have a Health Insurance Subsidy? Accepting a Job Offer Will Affect It.
If you’re currently receiving a health insurance subsidy from your state’s Affordable Care Act health insurance exchange, accepting a job offer is likely to impact that subsidy. If you’re offered health insurance by your new employer, the health insurance meets minimum value standards, and the health insurance wouldn’t cost you more than about 9.5% of your household income, you won’t be eligible for your health insurance subsidy any longer. Subsidies are only provided to people without affordable job-based health insurance available to them.
If you accept a job offer that doesn’t include health benefits, your subsidy may still be affected. The amount of the subsidy you receive is based on your estimated yearly income. Your new job will almost surely increase your income, resulting in a decreased or eliminated subsidy.
As soon as you know how your new job will affect your income, notify your health insurance exchange. It’s better to adjust your subsidy amount as soon as possible than it is to owe money back unexpectedly when you file your taxes.
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