Losing Your Employer-Sponsored Plan? Here’s What to Do

Americans with employer-sponsored health plans might be at risk of losing their coverage under the Affordable Care Act.

A new report from the Manhattan Institute says employer-sponsored coverage may also be on the chopping block for not meeting the higher coverage requirements the president’s signature legislation demands.

Avik Roy, Manhattan Institute fellow, reports that 60% of Americans have private-sector health insurance and that 93 million Americans, may see than plans either terminated in 2013. According to the Congressional Budget Office, more than half the population, or 156 million Americans, were covered by employer-sponsored coverage in 2013.

Plans are being dropped either because they are “illegal” because they do not meet the minimum acceptable coverage regulations under the ACA, or are not being grandfathered in under the new law. The White House had originally stated that only 15 million Americans would be impacted by these cuts.

“Those people are literally losing the coverage they had before because it is changing,” says Paul Howard, senior fellow at the Manhattan Institute. “You will see people in the individual market with really disruptive changes. Those losing coverage can potentially purchase a more expensive plan outside the exchange, or see if they are eligible for subsidies on exchange.”

According to a report from the Kaiser Family Foundation, 52% of people who are currently buying their own insurance will not be eligible for subsidies. Those who are subsidy eligible are individuals making up to $45,000 annually and families of four making up to $94,000 per year.

The Department of Health and Human Services has reported that the average cost for Americans for a mid-tier silver plan will be $328 a month pre-subsidy. Those who opt not to purchase coverage will face a fine of $95 per year, or 1% of their annual income starting in April 2014.

Kristin Stoll, consumer health insurance specialist with eHealthInsurance.com, says consumers who are seeing their employer-sponsored coverage cancelled should be sure to enroll in a plan by the end of open enrollment on March 31, 2014.

The next step is to determine subsidy eligibility, which will help to guide consumers as to whether or not they should be shopping on the federal or state-run exchanges at Healthcare.gov, or on off-exchanges.

Plans sold both on and off-exchange will now have to meet minimum requirements of coverage under the law. Stoll says if the overall subsidy is small, shopping off exchange may be a better option.

“If their subsidy is minimal and only $100 per year, it may not be worth it when you could have better options off exchange,” she says.