I'm starting a job: understanding a job-based plan offer

What a job-based offer is

Many employers offer health coverage to their workers through a group health plan. The employer chooses the plan or plans, usually pays part of the premium, and takes the employee's share out of each paycheck. This is the most common way people in the United States get health coverage, but it is not universal: not every employer offers a plan, and not every worker is eligible for the one that is offered. Part-time or temporary roles in particular may not qualify.

When you start a job that does offer coverage, there is usually a set time after you first become eligible during which you can sign up. If you let it pass, you may have to wait for the employer's next yearly enrollment period, unless a qualifying event gives you special enrollment rights later. The employer's benefits materials or human resources contact will say how long you have.

This pathway explains how to read the offer and how it fits with the other coverage you might have. It does not judge whether a particular plan is a good choice for you.

Reading the offer

A job-based plan offer usually comes as a packet or an online enrollment system. The plan documents should answer a few basic questions, and if they do not, the benefits office can:

• Your share of the premium. How much is taken from each paycheck for coverage for you alone, and how much for a spouse or children.
• What you pay when you get care. The deductible (the amount you pay for covered services before the plan starts paying), copayments and coinsurance, and the out-of-pocket maximum for the year.
• The network. Which doctors, hospitals and pharmacies the plan works with, and what happens if you see someone outside the network.
• When coverage starts. The first day you are covered, which may be after a waiting period.

If the employer offers more than one plan, the same questions help compare them. A plan with a lower paycheck deduction often has a higher deductible, and the opposite is also common. Which balance suits a household depends on how much care it expects to use, which is a personal judgment this site cannot make.

The waiting period

A job-based plan can make new employees wait before their coverage begins. HealthCare.gov's glossary defines this waiting period as the time that must pass before coverage can become effective for an employee or dependent who is otherwise eligible, and notes that the waiting period cannot be longer than 90 days.

Many employers use a shorter wait or none at all. The offer should say which applies. Knowing the exact start date matters because it tells you whether you need coverage for the time in between.

Covering the gap

How to handle the time before job-based coverage starts depends on what you have now:

• If you have coverage from a previous job, it may end when that job ends. COBRA can sometimes bridge the gap, and if you elect it within the allowed time, it generally covers you from the date the old coverage ended. The lost my job pathway explains COBRA's steps.
• If you have a Marketplace plan, you can usually keep it until the job-based coverage begins and then end it. See the section below about reporting the offer.
• If you have no coverage, losing other coverage would normally open a Special Enrollment Period for a Marketplace plan, but simply starting a job does not. If your income is low, Medicaid has no enrollment window. The enrollment periods pathway explains which events qualify.

How an offer affects Marketplace savings

Being offered job-based coverage changes what the Marketplace can do for you, even if you decline the offer. HealthCare.gov explains that if your employer's plan is considered affordable and meets a minimum value standard, you generally do not qualify for a premium tax credit or other savings on a Marketplace plan. You could still enroll in a Marketplace plan, but you would pay the full price.

"Affordable" here has a specific meaning: it compares your share of the premium for the lowest-cost plan the employer offers with your household income, using a percentage that is set each year. "Minimum value" means the plan covers at least a set share of the cost of covered services and includes substantial hospital and doctor coverage. Because the affordability percentage changes from year to year, this site does not state it. The Marketplace application asks about job-based offers and works out the result, and many employers provide information about their plan that the application asks for.

If the offer is not affordable by that measure, or does not meet minimum value, you may be able to decline it and get savings on a Marketplace plan instead. HealthCare.gov explains how this works on its page about changing from a job-based plan to a Marketplace plan.

If you already have a Marketplace plan

People sometimes start a job while already enrolled in a Marketplace plan with a premium tax credit. HealthCare.gov asks enrollees to report changes in income and job-based coverage offers to the Marketplace as soon as possible. The reason is practical: the tax credit is paid in advance based on your estimates, and it is reconciled when you file your federal tax return. If you keep receiving advance payments after you become eligible for affordable job-based coverage, you may have to pay some or all of them back.

When the job-based coverage begins, you can end the Marketplace plan through your Marketplace account. Ending it after the new coverage starts, rather than before, avoids a gap.

Adding family members

A job-based plan offer may include coverage for a spouse and children, usually at a higher cost. Whether family members can use the Marketplace instead, with savings, depends on a separate affordability test for family coverage, which HealthCare.gov explains alongside the test for the employee. The Marketplace application handles both.

Later life events can also change who is covered. The US Department of Labor explains that marriage, birth, adoption or placement for adoption gives special enrollment rights in a group health plan, with at least 30 days to request enrollment. A new spouse or child can join then, without waiting for the employer's yearly enrollment period.

Questions to take to official help

The employer's benefits office is the source for the plan's own rules. HealthCare.gov and its Navigators can explain how an offer affects Marketplace savings, and the US Department of Labor's Employee Benefits Security Administration answers questions about rights in job-based plans.

Next pathway: Low income: how Medicaid and CHIP work