What You Need To Know About US Health Insurance
Health insurance in the US can be a confounding topic to companies based elsewhere who are hiring in the US. It differs in significant ways from health insurance in other countries, and there are many things employers based outside the US need to know.
Here is what you need to know about US health insurance.
You need to provide health insurance to your US employees.
In the US, most full-time employees get health insurance through their employer.
Unlike in other countries, the US government does not provide health insurance to workers below age 65. The US government only provides Medicare to Americans age 65 and older and people with disabilities. This is because in the US, a large constituency wants to limit the role of government in people’s lives and how high taxes are.
Under the Affordable Care Act, companies with 50 or more full-time employees must provide health insurance to 95% of their full-time employees or pay a significant penalty to the IRS. As a result, most large employers provide health insurance for all of their employees. Many small businesses provide health insurance for their employees as well.
If you hire full-time employees in the US, they will expect you to offer health insurance. If you don’t, they may turn down a job offer or leave for other employment opportunities.
Health insurance premiums
Every month, patients pay a premium to their health insurance company to pay for coverage. For employer-sponsored health insurance, the employer and the employee split the cost. The employer will take money out of an employee’s paycheck to pay for the employee’s share of the premium, and the employer will pay for the rest of the premium.
HMO vs. PPO
There are two different kinds of health insurance plans: HMOs and PPOs. HMOs (health maintenance organizations) require a referral from the patient’s primary care doctor for the insurance company to cover the cost of seeing a specialist doctor. PPOs (preferred provider organizations) allow patients to get reimbursed for any specialist that they choose to see, without a referral. PPOs typically cost more than HMOs.
Each health insurance company has a provider network. That is, there are certain doctors that a health insurance company will reimburse patients for seeing–these doctors are “in network.” Every other doctor, who is not in the insurance company’s network, is “out of network.” Patients have to pay out of pocket for doctors that they see out of network. If they have a PPO, they can get reimbursed for seeing an out-of-network doctor, while if they have an HMO, they have to cover the full cost of seeing an out-of-network doctor.
Individual health insurance
People who are not offered health insurance from an employer, such as self-employed people, can buy health insurance on their own and pay the full premium. This is called individual health insurance. They have the option of buying health insurance on a state health insurance exchange, from the national health insurance exchange healthcare.gov, or directly from the insurance company, depending on the state’s regulations. The Affordable Care Act, also known as Obamacare, made it significantly easier to buy individual health insurance. However, most employees still expect to get health insurance through their employer.
Dealing with health insurance in the US can get confusing. Working with a US partner like Alariss can help you navigate these issues. If you work with us, we will provide health insurance to the US employees that you hire through us. If you want to work with us, schedule a call with us today.