Navigating the wild world of medical insurance can be a serious challenge. That’s why employer-provided health care can be such an appealingly simple, cost-effective option. After all, most of the hard work — including monthly payments — is taken care of behind the scenes. However, even if you’re lucky enough to work for a company that offers insurance plans, it’s vital to make sure the available options suit your unique needs. Here are a few factors that may help you decide when it’s smart to reject employer health insurance.
Are you still covered by a parent or legal guardian?
While a report by the Kaiser Family Foundation states that 49.6 percent of Americans receive health care coverage through their employers, you may be able to avoid the strain that would put on your paycheck. According to the National Conference of State Legislatures, “the Patient Protection and Affordable Care Act (ACA) mandates that all health insurance carriers in every state that offer coverage to both adults and their dependents must allow dependents to remain on their parents or guardians’ “family” plans until the dependents are 26 years old.” So, if you’re under the age of 26 and your parents’ or legal guardians’ health care is better than what your current company offers, consider abstaining from your job’s plan and pocketing the savings until you’re no longer eligible.
Is it too expensive?
Employer health insurance is undeniably convenient, but it comes at a cost. The Valent Group, referencing an annual Employer Health Benefits Survey, says, “58 percent of covered workers are employed in a firm that offers multiple health insurance plan options.” That level of variety can be appealing, but even choosing the bare-bones option may put undue stress on your finances.
The Kaiser Family Foundation cites the fact that “the average single premium increased 4% and the average family premium increased 5% over the past year. Workers’ wages increased 3.4% and inflation increased 2%.” The article goes on to say that “the average premium for family coverage has increased 22% over the last five years and 54% over the last ten years, significantly more than either workers’ wages or inflation.” If your employer’s health insurance plan is just too expensive to justify, consider looking for a more affordable option.
Is it a bad fit?
It should come as no surprise that not all health care plans are created equal, and some may not align with your unique needs. For instance, if you have a family you’ll need an option that covers your children, not just yourself. Or, maybe your employer doesn’t cover services that are important to you, such as vision or dental. Additionally, Insure.com’s Beth Orenstein states that “most, but not all, employers help pay premiums. The amount they subsidize can vary from employer to employer. If your employer doesn't help you pay your premiums, you might find a better deal by buying an individual health plan.” Before you decide to opt into any plan, it’s important to make sure that it covers what you need at a price you can afford.
Ultimately, whether you decide to adopt your employer’s health insurance, rely on offerings provided by the Affordable Care Act, or seek other options, is up to you. Just make sure to read the fine print and evaluate whether it will meet your needs before signing on the dotted line.