B: Employer Provided Insurance
B-1, Employer-Provided Insurance
Health insurance offered by your employer (commercial or self-insured):
May provide single or family coverage
May be included in a cafeteria plan
Level of premium contribution by employer may vary
Not eligible for premium tax credits or subsidies
When available, High Deductible Health Plans (HDHPs) are typically less expensive than non-HDHP plans
FSA and HSA options are only available with HDHPs
HRAs are employer-funded spending accounts and are not available with non-employer sponsored plans
Learn more: https://marketplace.cms.gov/outreach-and-education/how-an-individual-coverage-hra-offer-works.pdf
FSAs cannot be used with Marketplace plans
B-2, Employer-Provided Insurance
Group Health Plan
General term for type of health insurance offered by an employer, union, or association to its members. The opposite of individual coverage and usually requires enrollment of a certain number and/or percentage of employees of a given employer.
B-3, Employer-Provided Insurance
Cafeteria Plan (Section 125 Plan)
Cafeteria plans allow employers to offer various benefits, such as health insurance, on a pre-tax basis to their employees.
B-4, Employer-Provided Health Insurance
Flexible Spending Account (FSA)
A special account you and your employer can put money into that you use to pay for certain out-of-pocket health care costs. You do not pay taxes on this money. This means you will save an amount equal to the taxes you would have paid on the money contributed to your FSA. There is an annual cap on the amount that can be contributed by you or on your behalf. FSAs are considered “use it or lose it funds,” although a certain amount can be rolled over from one year to the next. Unused FSA funds are returned to the employer.
Health Reimbursement Arrangement (HRA)
An employer-funded spending account from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement. HRAs are sometimes called Health Reimbursement Accounts.
Health Savings Account (HSA)
A type of savings account (sometimes offered by an employer) that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. You are able to lower your overall health care costs by using untaxed HSA dollars to pay for deductibles, co-payments, co-insurance, medications, and other qualified health care expenses. HSA funds generally may not be used to pay premiums. HSA accounts can be rolled over year to year and remain with the employee upon termination of employment. HSA funds may be invested and earn interest that is tax free.
HSA vs. HRA vs. FSA
B-5, Employer-Provided Health Insurance
Consolidated Omnibus Budget Reconciliation Act (COBRA)
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives some workers who lose employment the option to continue health insurance coverage for limited periods of time (usually 18 months). The full cost of COBRA premiums is the responsibility of the employee.
These and associated educational materials have been developed using our available resources. They are not intended to serve as advice or recommendations on selecting a specific type of coverage or plan. Any errors or omissions are unintentional.
These materials were supported by funds made available by the Kentucky Department for Public Health’s Office of Health Equity from the Centers for Disease Control and Prevention, National Center for STLT Public Health Infrastructure and Workforce, under RFA-OT21-2103.
The contents of these materials are those of the authors and do not necessarily represent the official position of or endorsement by the Kentucky Department for Public Health or the Centers for Disease Control and Prevention.