What Is Employer-Sponsored Health Insurance?

Health insurance is a type of protection that helps people afford the costs of health care, preventive medicine and prescription medications. Employer-sponsored health insurance is one type of health insurance available to some individuals.

Identification

Sometimes called group health insurance, an employer-sponsored health insurance plan is a type of insurance made available to employees of a particular company as well as their families.

Cost

For employer-sponsored health insurance plans, companies and businesses pay for at least a portion of the premiums or fees for coverage, while the employee is responsible for the remainder. The specific cost to the employee varies depending upon the type of coverage and the amount of an employer's contribution.

Features

Employer-sponsored health insurance plans carry eligibility requirements, such as a minimum amount of years of service or hours worked per year. Employers also typically offer insurance one time each year when employees have the option to sign up for coverage, known as open enrollment.

Benefits

Generally, you cannot receive a denial for an employer-sponsored health insurance plan for a pre-existing condition, provided you enroll during open enrollment. Employer-sponsored health insurance plan are typically less expensive than health insurance plans purchased directly by individuals or families, according to the Insurance Information Institute.

Considerations

Not all employers provide employer-sponsored health insurance plans as insurance coverage is an added expense for companies.

References

• Insurance Information Institute: Should I participate in my employer's health insurance program?