If your workplace provides health insurance, it can be a big win.
Employer-sponsored health insurance plans are often subsidized, meaning your company pays part of your monthly premiums, making coverage more affordable.
It’s no surprise that over half of the non-elderly population in the U.S. gets health insurance through their employer.
But what if you don’t like your job’s health insurance plan? Maybe it’s too expensive, or the coverage doesn’t meet your needs. This raises a common question: can you get Obamacare if your job offers insurance?
The short answer is yes, but there are some important considerations to keep in mind. This blog will explore the differences between employer health insurance and Obamacare, explain if you can enroll in Obamacare, and outline the conditions under which you might qualify for subsidies.
Understanding Employer Health Insurance vs. Obamacare
What is Employer Health Insurance?
Employer health insurance is coverage offered by companies to their employees. Employers often pay a portion of your monthly premium, and you pay the rest. These plans usually include benefits like medical, dental, and vision coverage. Since the employer helps subsidize the cost, these plans tend to be more affordable than buying a policy on your own. For this reason, employer-sponsored plans are the most popular type of health insurance in the U.S.
What is Obamacare?
Obamacare, also known as the Affordable Care Act (ACA) or Marketplace health insurance, offers individuals and families the opportunity to buy health insurance through the government’s online Marketplace. These plans are available for people who don’t get insurance through work, can’t afford employer coverage, or are self-employed. Obamacare plans offer comprehensive coverage, including doctor visits, hospital stays, prescriptions, and preventive care.
Many people turn to the Marketplace for affordable health coverage, especially because they may qualify for government subsidies to help lower the cost of monthly premiums based on their income.
Can I Get Obamacare If I Have Employer Insurance?
The good news is that yes, you can still get Obamacare even if your job offers health insurance. However, there are a few important things you should consider before making that switch. Here’s what you need to know:
1. You Can Enroll in Obamacare, But Subsidies May Not Be Available
If your employer offers health insurance, you’re free to opt-out and buy a plan through the Obamacare Marketplace instead. However, you probably won’t qualify for government subsidies that lower the cost of monthly premiums unless your employer’s plan is considered “unaffordable” or lacks minimum value.
Under the Affordable Care Act, an employer’s plan is considered “unaffordable” if your share of the monthly premium for self-only coverage is more than 9.83% of your household income. If the cost is less than this, you won’t be eligible for subsidies, meaning you’ll have to pay the full price of a Marketplace plan.
2. Your Employer Plan Must Be “Affordable” and Provide “Minimum Value”
There are two critical tests used to determine if you can qualify for Obamacare subsidies despite having employer health insurance:
- Affordability Test:
As mentioned, if your employer’s plan costs more than 9.83% of your household income for self-only coverage, it’s considered unaffordable. In this case, you may qualify for a subsidy on the Marketplace.
- Minimum Value Test:
An employer’s plan must also meet the ACA’s “minimum value” standard, meaning it must cover at least 60% of the total allowed costs of covered services and include substantial coverage for inpatient hospital and physician services. If your employer’s plan doesn’t meet these minimum value standards, you might be eligible for a subsidy.
If your job offers insurance that is both affordable and meets minimum value standards, you’re unlikely to qualify for financial assistance through Obamacare.
What If You Don’t Accept Job-Based Coverage for Obamacare?
Well, the situation is likely to remain the same.
If you decide to purchase a Marketplace plan instead of your employer’s health insurance but your employer’s plan is deemed affordable and meets minimum value, you will not qualify for subsidies. This means you will have to pay the full premium price for an Obamacare plan. Depending on your situation, this could be significantly more expensive than sticking with your employer’s plan, especially if your employer is covering a large portion of the cost.
Normally, you may only enroll in Obamacare during the Open Enrollment Period, which typically runs from November until mid-December. However, if you have a qualifying life event, such as getting married, having a baby, or relocating to a new location, you may enroll during a Special Enrollment Period.
If you lose your job or your employer suddenly stops offering health insurance, that’s also considered a qualifying life event, and you can then switch to Obamacare even outside of the usual Open Enrollment timeframe.
Comparing Employer Health Insurance vs. Obamacare
1. Cost
- Employer Health Insurance: The expense of employer health insurance is often shared between the employer and the employees. Employers typically pay a portion of the premium, making the plan more affordable to employees.
- Obamacare: If you qualify for subsidies based on your income, a Marketplace plan could be cheaper. However, without subsidies, you may find that Obamacare is more expensive than your employer’s plan, especially if your employer contributes significantly toward your premium.
2. Flexibility
- Employer Health Insurance: Employer-sponsored plans are often limited to a specific network of doctors and hospitals. If you need specialized care outside the network, your costs may rise, or coverage might not be available.
- Obamacare: One of the advantages of Obamacare is the ability to choose from different levels of plans (Bronze, Silver, Gold, and Platinum) with varying networks and coverages. This gives you more flexibility to pick a plan that suits your healthcare needs and budget.
3. Coverage
- Employer Health Insurance: Most employer-sponsored health plans offer comprehensive coverage, including medical, dental, and sometimes vision. However, coverage details can vary widely between employers and might not always meet your specific needs.
- Obamacare: Marketplace plans must meet the ACA’s minimum coverage standards, which include essential health benefits like hospitalization, prescriptions, mental health care, and preventive services. Some employer plans may have limited coverage, making Obamacare a better option for those with specialized health needs.
When Might Obamacare Be a Better Option?
Although employer-sponsored health insurance is typically the most cost-effective option, there are situations where choosing an Obamacare plan might be better for you:
- High Premiums: If your employer’s plan is too expensive based on your household income, you might qualify for subsidies through the Marketplace.
- Inadequate Coverage: If your employer’s plan doesn’t offer the coverage you need, or if it doesn’t meet the ACA’s minimum value requirements, you might find better options on the Marketplace.
- Self-Employment or Multiple Jobs: If you work part-time, are self-employed, or have more than one job, you may prefer the flexibility of choosing a Marketplace plan that fits your unique situation.
The Bottom Line
You can get Obamacare even if your job offers health insurance, but it’s important to consider whether you’ll qualify for subsidies. If your employer’s plan is affordable and meets minimum value standards, you won’t be eligible for financial assistance through the Marketplace, which means you’ll have to pay full price for an Obamacare plan.
However, if your employer’s plan is unaffordable or doesn’t provide adequate coverage, you could potentially save money by switching to a Marketplace plan. When weighing your options, consider the costs, coverage, and flexibility of both your employer’s health insurance and Obamacare. Understanding these differences will help you make the best decision for your healthcare needs and financial situation.
