An employer is not required to offer group health insurance. In fact there may, sometimes, be good cause to NOT offer group health insurance. For lower wage workers who may be eligible for premium assistance through Covered California, the offer of group health insurance may disqualify them and their family from receiving premium assistance. By not offering group coverage an employer may open up better options for employees.

 

Pros

Taking this approach limits the risk of escalating health care premium costs. 

Under the right conditions and if communicated properly this approach may create goodwill among employees.

Employees and their families have access to premium assistance if eligible.

 

Cons

For employers with more than 50 full time equivalent employees there may be tax penalties assessed.

Tax penalties are not tax deductible.

Individual health insurance provider networks may be narrower than group insurance provider networks.