Ask the Health Insurance Expert
QDoes an employer have to offer health insurance to hourly workers if it offers coverage to management? If so, does the employer have to offer the same plan?
No, an employer can offer health insurance to one category of employees and not to another. Many employers, for instance, offer health insurance benefits to full-time workers, but not to part-time employees. Or they might offer health insurance to managers and not to hourly workers. They can also offer different types of plans to different categories of employees.
The employer, however, must treat all the people within the classification the same. For instance, if the employer decides to offer coverage only to managers, the boss can't exclude coverage for unpopular managers or play favorites by offering coverage to a few hand-picked hourly workers. The distinctions for who does and doesn't get offered health insurance must be employment-based. The categories can't be based on personal characteristics, such as gender or age.
Employers do not have to offer health insurance at all, although most large employers do as a way to attract and retain employees. Starting in 2014 under federal health care reform, though, businesses with more than 50 employees will have to pay a financial penalty if they don't provide employer-sponsored health insurance and at least one of their workers meets low-income requirements for federal subsidies to purchase coverage.
Also in 2014, insurance exchanges -- which will serve as marketplaces for individuals and small groups to buy health insurance -- will open in every state. Health plans sold through the exchanges won't be allowed to charge higher premiums or exclude coverage for people with pre-existing health conditions.
Forty-five percent of employers say they are considering offering health benefits to a portion of their workforce in 2014 and directing other employees to the exchanges. Some of these employers plan to give financial help to their workers to buy their own coverage.
(The opening of the exchanges assumes the federal health care reform law will remain intact. The U.S. Supreme Court heard arguments in March over a challenge to the law's constitutionality and is expected to issue a ruling in June.)