Under the health law, large employers that don’t offer their full-time workers comprehensive, affordable health insurance face a fine. But some employers are taking it a step further and requiring workers to buy the company insurance, whether they want it or not.
Many workers may have no choice but to comply.
Some workers are upset. One disgruntled reader wrote to Kaiser Health News: “My employer is requiring me to purchase health insurance and is automatically taking the premium out of my paycheck even though I don’t want to sign up for health insurance. Is this legal?”
The short answer is yes. Under the federal health law, employers with 100 or more full-time workers can enroll them in company coverage without their say as long as the plan is deemed affordable and adequate. That means the employee contribution is no more than 9.5 percent of the federal poverty guideline and the plan pays for at least 60 percent of covered medical expenses, on average.
“If you offer an employee minimum essential coverage that provides minimum value and is affordable, you need not provide an opt out,” says Seth Perretta, a partner at Groom Law Group, a Washington, D.C., firm specializing in employee benefits.
If a plan doesn’t meet those standards, however, employees must be given the opportunity to decline those company plans, under the health law. They can shop for coverage on the health insurance marketplaces and may qualify for premium tax credits if their income is between 100 and 400 percent of the federal poverty level.
Those premium subsidies aren’t available to workers whose employer offers good coverage that meets the law’s standards.
Not that many employers are expected to strong arm their workers into buying health insurance. Those that do may be confused about their responsibilities under the health law, mistakenly believing that in order to avoid penalties they have to enroll their workers in coverage.
“That is just dead wrong,” says Timothy Jost, a law professor at Washington and Lee University who’s an expert on the health law.
“Nothing in the Affordable Care Act directs employers to make their coverage mandatory for employees,” says a Treasury Department spokesperson. The law requires large employers “to either offer coverage or pay a fee if their full-time workers access tax credits to get coverage on their own in the marketplace.”
Employer penalties for not offering insurance that meets the health law’s standards can run up to $3,000 per employee.
For employers, forcing coverage on their workers could be counterproductive. “Do you really want to limit employees’ ability to select whether they get this coverage?” says Amy Bergner, managing director at human resources consultant PwC. “What impact does that have from talent management perspective?”