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Can your employer force you to keep their insurance coverage if you have found your own insurance?


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Wiki User
2015-07-15 20:48:15
2015-07-15 20:48:15

No. But companies can usually get better rates and coverage in group insurance, than can an individual.

A Different OpinionI am sorry but I disagree with both points in the answer above as absolutes.

First, if the employer is paying 100% of the employees� coverage then the company is legally obligated to do so for ALL employees and the employee can not opt out. It would be considered discriminatory and a violation of federal law.

Second, in many if not most cases group coverage is more expensive than individual coverage in states where individual coverage is underwritten and the insurance company can deny coverage due to medical reasons. Here is why. When an insurance company offers insurance to a group they must cover all employees. Statistically they know that some of those people are not in good health and will have significant claims. Since they can not discriminate in pricing among employees they charge all employees more to make up for those who will cost them a lot.

Conversely if they can review medical history and refuse coverage to those who they have a reasonable expectation will cost them a lot of money they can offer coverage to healthy individuals at a lower price. For instance, some who is bipolar, has Type 1 diabetes, been diagnosed with Muscular Dystrophy or MS will be automatically declined in states where the carrier is allowed to do that. You could have any or all of these and get coverage from your employer.

Some states do guarantee coverage to all so this rule would not apply there.

Sorry, the second answer above is completely wrong.

An employer can require that you show proof of coverage from another source if you want to decline their coverage, but they cannot FORCE you to accept their coverage. That is illegal, regardless of whether or not the company is paying any percentage of the coverage (including 100%).

Group coverage is universally cheaper than individual coverage, except in extraordinarily weird corner cases, and such corner cases tend to be highly temporary. Pooled risk is why - even the super-healthy will pay less as part of a group plan, as the individual plan is unable to fully assess the actual risk the person poses. This sounds counter-intuitive, but the problem is that individual plans have to include the risk profile of everyone in that category, since they're only getting premiums from you. Essentially, while there is some ability to pool risk over all people buying individual insurance, the overhead for administering that type of insurance, combined with the inability to well-assess the actual health profile of an individual, means that individual plans will (on average) be significantly more expensive than group plans.

But that's all irrelevant to this discussion, since ALL employer-sponsored plans will be group-type coverage.

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