Employer-sponsored health plans provide medical care for employees and their dependents through insurance or reimbursement. Employers are not legally required to offer health insurance to workers, but if they do, they must comply with laws that protect the portability and continuation of health coverage for their employees. Employer health insurance laws ensure that employees have access to plan information to understand their benefit rights.
Access to Plan Information
Certain employer health insurance laws require employers to give workers access to information regarding health plans. Private health plans are covered by the Employee Retirement Income Security Act (ERISA), which is a law that protects plan participants' rights and provides participants access to health plan rules, financial information, and operational and management documents for the plan. Once employers decide to offer a health insurance plan, they are legally obligated to provide participants with a summary plan description (SPD) to inform participants how their health insurance plan operates.
Continuation of Coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a health insurance law that provides employees and their dependents access to health insurance if they no longer qualify for an employer-sponsored plan. Voluntary or involuntary job loss, reduction in hours, layoff, death or divorce are situations where an employee is eligible to receive health insurance continuation through COBRA. With COBRA, employees can choose to continue group health coverage for up to 36 months in some cases. The employee may be required to pay a premium of up to 102 percent of the cost of the health insurance plan. Employers are obligated to notify employees that they are eligible for COBRA within 30 days of a qualifying event.
Portability of Coverage
The Health Insurance Portability and Accountability Act protects an employer-sponsored plan participant's right to obtain new health insurance despite having a preexisting condition. The law allows an employee who was previously enrolled in an employer plan the opportunity to enroll in a new employer plan or individual plan without limiting coverage for any preexisting conditions. The act prohibits discrimination against a plan participant because of current health status. It also allows participants to purchase new coverage once COBRA or employer plans have been exhausted.
Employee Rights
Employee rights under employer health insurance laws stem from qualifying events such as job termination, death, birth of a child or illness. Employees have the right to receive protection under these laws if their personal situation qualifies and it they work for a qualifying employer. It is important to note that not all employers are subject to health insurance laws. For example, COBRA laws apply to private employers with 20 or more employees. If an employer is not required to abide by certain health insurance laws, employees do not have protection under the laws.
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