Health Insurance Benefits: Your Rights

Federal law mandates employers with 50 or more full-time employees to offer health insurance to eligible employees. Small employers are generally not legally obligated to provide health insurance to their employees. Still, some companies offer it anyway.

Legal help is available if you believe your employer has violated federal laws regarding health insurance. Contact an employment law attorney in your area for help ensuring your employer’s compliance with federal regulations.

Health benefits can include medical, disability, dental, and life insurance. When an employer offers health benefits, the U.S. Department of Labor (DOL) enforces laws that protect an employee's rights under their health plans.

The following article provides an overview of your rights as an employee regarding health insurance benefits. You’ll also find helpful guidance on choosing the best insurance plan for you and your family.

When an Employer Is Required To Provide Health Care Coverage

The requirement for employers to provide health care coverage depends on the size of the business and the status of employees. Large employers, typically those with 50 or more full-time employees, must offer health care benefits to at least 95% of their full-time employees. Employers who fail to meet this requirement are subject to IRS fines.

In contrast, small business owners with fewer than 50 full-time employees may not be subject to the same mandate. But, small employers can choose to provide health care coverage voluntarily. Employers and employees need to be aware of these distinctions. Compliance with federal regulations ensures eligible employees can access necessary health insurance policies.

Anti-Discrimination in Employment Health Benefits

Federally-mandated employee benefits include Social Security, Medicare, unemployment insurance, and workers' compensation.

Employers aren't usually obligated to offer health benefits. But once they do, they must follow federal laws against discrimination. This means they can't treat employees unfairly based on things like gender, race, age, nationality, religion, or disability when it comes to health benefits. These laws are there to make sure everyone gets a fair deal.

As with other areas of employment, differences in health benefits coverage can't be based on an employee or dependent's gender, race, age, national origin, religion, or disability.

An employer providing employees with health insurance may not, among other things:

• Provide lesser coverage or cease offering coverage to older workers or workers who become pregnant
• Treat pregnancy-related disabilities (including miscarriage and post-childbirth recovery) differently from other health conditions
• Refuse to provide coverage based on an employee or dependent's actual disability

ERISA and Enforcement of Health Insurance Rights

Your employer's health plan must follow certain rules to make sure you're treated fairly. These rules are set up to protect you and other employees. They come from a law called the Employee Retirement Income Security Act of 1974 (ERISA).

Under ERISA, your employer is required to:

1. Tell you about who can join the plan, how to make claims, what rights you have, and if there are any changes to the plan
2. Handle and invest the plan's money wisely to benefit everyone in the plan

By following these rules, ERISA helps make sure you get the health benefits you're supposed to get.

Family and Medical Leave

Taking a leave of absence for a medical reason isn't officially a "benefit." But federal law makes sure that workers can't get fired just because they need time off for medical reasons.

The federal law that makes this happen is the Family and Medical Leave Act (FMLA). The FMLA applies to employers with at least 50 employees. Eligible employees are those who have worked with the same employer for at least 12 months and 1,250 hours.

But, this federal law doesn't require the medical leave to be paid. Generally, the law provides unpaid medical leave without someone risking the loss of their job. Some states (including California and New York) offer partially paid leave.

ERISA and Health Care Plan Enforcement

The Employee Retirement Income Security Act (ERISA) governs employees' health insurance plans. The act covers retirement benefits, like pensions and health insurance benefits. The health insurance coverage part of ERISA has been amended several times. Two amendments are particularly important for workers:

• Consolidated Omnibus Budget Reconciliation Act (COBRA)
• Health Insurance Portability and Accountability Act (HIPAA)

ERISA and its amendments do not cover every health plan. They only cover those purchased through an employer or a group for the benefit of employees or members. Further, ERISA does not require employers to provide health insurance. It only requires that any health plan provided comply with ERISA's requirements.

COBRA

COBRA is a federal insurance coverage program that requires employers to temporarily continue group health coverage. It applies to full-time and part-time employees who resign or are terminated for any reason other than "gross misconduct." It ensures that employees can continue health coverage after job loss.

COBRA applies to employers with 20 or more employees within their group health insurance plans on more than 50% of the business days of the previous calendar year. The employee at issue must be a "qualifying beneficiary." This means they were covered by a group health plan before the termination of employment as an employee, an employee's spouse, or an employee's dependent child.

HIPAA

HIPAA allows insurance companies to transfer a patient's medical records to a different doctor or insurance company without impinging on the patient's privacy. It also safeguards sensitive health information and prevents discrimination based on pre-existing conditions.

The Affordable Care Act (ACA)

The Affordable Care Act (ACA) is not an amendment to ERISA. But, it greatly impacts how health insurance works and what providers should charge for routine and preventative care.

The ACA also requires large employers to offer affordable coverage to covered employees.

Types of Health Plans and Benefits

Federal and state laws require most employers to provide employee health plans and benefits. This often makes up a significant portion of an employee's total compensation package. So, both new and existing employees have important questions about employee benefits to ask. Common types of employer-provided benefits include:

• Basic healthcare benefits (such as medical, vision, and dental insurance)
• Retirement and pension plans (such as 401k's)
• Life insurance and disability insurance
• Domestic partnership benefits
• Family and medical leave

Employee benefits packages may also have other fringe benefits, which can include:

• Transportation benefits
• Tuition reimbursement
• Child or dependent care assistance
• Gym membership discounts
• Stock options

HSAs, FSAs, and the Affordable Care Act

Understanding Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) is crucial for individuals looking to optimize their healthcare expenses:

• HSAs empower employees to contribute pre-tax funds for qualified medical expenses.
• FSAs, also employer-sponsored, allow pre-tax contributions but come with a "use-it-or-lose-it" feature annually.

Both accounts cover copayments and prescriptions.

Employees should also be aware of the option to purchase health insurance through the Affordable Care Act (ACA). The ACA provides diverse coverage plans and may offer income-based subsidies. As employees navigate these choices, it's essential to ask pertinent questions before selecting a health insurance plan. This ensures your coverage is aligned with your personal circumstances and preferences.

Open Enrollment Periods

During “open enrollment” times, both existing and new employees often have benefits questions to pose to human resources or the insurance company. These questions may cover aspects such as:

• The specifics of a life insurance policy
• The company's benefits for domestic partnerships
• Various employee perks

Understanding the types of employee benefits is crucial. They contribute significantly to an individual's total compensation.

Open enrollment is a pivotal time for employees to assess and modify their benefit selections. It's essential to act promptly. The window for enrollment is often brief—typically 30 days or less. Failure to enroll within this period may result in default coverage provided by the company or, in some cases, no coverage at all.

Questions To Ask Yourself Before Enrolling in an Employer Health Plan

As you consider enrolling in an employer health plan, it's essential to ask both yourself and your employer the right questions. This approach ensures you understand the details of the benefits offered and how they align with your personal and family needs.

• Who in your family needs coverage?
• When does coverage begin? Is there a waiting period?
• What is the cost of any medications you currently take?
• How much vacation time, sick time, and paid time off are provided? When do these benefits start accruing?

Questions To Ask Your Employer Before Enrolling in an Employer Health Plan

Ask your employer the following questions before choosing a healthcare plan.

• Are my spouse and kids eligible under the plan?
• How much is my monthly premium, office co-pays, or prescription drug costs?
• Does the plan cover preexisting conditions? Check for any waiting periods or exclusions.
• Is my domestic partner covered under the plan? Understand eligibility criteria, especially in regard to same-sex vs. opposite-sex partners.
• What is the annual deductible, and what are my out-of-pocket expenses, if any?
• When does medical, dental, and hospitalization coverage end. Clarify end-of-employment coverage details.
• What type of pension or retirement plan is there? How much does the company contribute?
• Are there any family-friendly benefits, such as childcare reimbursement or back-up childcare?
• Are there any educational-related plans?
• Are there any travel reimbursement plans or travel credits?
• What is the process for filing claims or processing an appeal?

For more information on your employee benefits options, check with your employer for a list of frequently asked questions or speak with your hiring manager before accepting a job. Often, the employee benefits handbook includes answers to common benefits questions.

Review the Plan's Summary Plan Description (SPD)

Your health plan administrator should provide a copy of this document. It outlines your benefits and legal rights under ERISA. It also contains information about the coverage of dependents, what services will require a co-pay, and the circumstances under which your employer can change or terminate a health benefits plan.

Family Status Changes

Significant life events may signal a need to change your health benefits. These include:

• Marriage
• Divorce
• Childbirth
• Adoption
• Death of a spouse

You, your spouse, and dependent children may be eligible for a special enrollment period under HIPAA provisions. Even without life-changing events, the information provided by your employer should tell you how you can change benefits or switch plans.

If your spouse's employer also offers a health benefits package, consider coordinating both plans for maximum coverage.

Plan for Healthcare in Retirement

Check your SPD to see what health benefits, if any, extend to you and your spouse during your retirement years. You can also consult with your employer's human resources office, your union, or the plan administrator.

Make sure there is no conflicting information about the benefits you will receive or the circumstances under which they can change or be eliminated. With this information, you can make other important choices, like finding out if you are eligible for Medicare and Medigap insurance coverage.

Know How to File an Appeal if Your Health Benefits Claim is Denied

Understand how your plan handles grievances and where to make appeals of the plan's decisions. Keep records and copies of correspondence. Check your health benefits package and your SPD to determine who is responsible for handling problems with benefit claims.

If you do not receive a response to your complaint, contact the Employee Benefits Security Administration (EBSA) for assistance.

Health Benefits and Employee Rights: Get Legal Help

Are you an employee with questions about what you're entitled to in your job's health plan? Consider reaching out to a local employment lawyer. They can provide invaluable advice on legal matters related to employment health benefit plans. They can also help make sure that your rights are upheld and protected.