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employer-sponsored health plans

What are employer-sponsored health plans?

Employer-sponsored health plans are health insurance that is offered to employees and their dependents (and in most cases, spouses) as a benefit of employment. Employer-sponsored health plans currently provide some level of health coverage for approximately 160 million Americans — nearly half the total population of the country. Health insurance benefits are more likely to be provided by larger companies; in fact, an estimated 99 percent of companies with 200 or more workers offer health benefits, according to testimony in Congress.

However, the plans face rapidly escalating premiums – up 55 percent from 2007 to 2017, with workers’ share of the premiums increasing by 74 percent during that decade. Deductibles and other out-of-pocket expenses have also increased rapidly during that time.

The Affordable Care Act, which was signed into law in 2010, includes an employer mandate, designed to increase participation by employers and by more of their employees. The employer mandate applies to all businesses with at least 50 full-time equivalent employees. These businesses are required to offer affordable, minimum value insurance to their full-time (30+ hours per week) workers or face a potential tax penalty. The employer mandate was phased in for larger companies starting in 2015, and applied to all companies with 50 or more full-time equivalent employees by the start of 2016.

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