The number one reason employees do not want the current group insurance is because they currently have coverage elsewhere, often because they are eligible for their parents' plan or prefer a spouse’s or partner’s plan.
“Some individuals are able to get a better deal through the employer sponsored medical plan of their spouse or domestic partner or they don’t mind paying a little more to be on the same policy as their spouse or domestic partner,” said Pace.
Some employees are steering clear of their company’s plan if they want to continue to see their current doctors or receive treatment at a hospital that are excluded from the current network.
“Generally, the contribution the employer makes toward monthly premiums for the group plan reduces the cost of the insurance for each worker," Lopez said. "In order to receive comparable coverage, consumers may need to pay more out of their own pockets towards premiums for their plan.”
While some employees skip the company insurance and buy their own on the marketplace, others are avoiding coverage altogether because they are healthy and deem the coverage unnecessary or can not afford it.
Some consumers are finding better deals through the private market, but for people who are employed, there are “several headwinds against this option making financial sense,” said Pace. Not only does the individual lose his employer contribution, but he is also paying for the premiums with post-tax dollars. Other people who are eligible for affordable coverage from their employer are unlikely to qualify for a subsidy through the ACA marketplace.
The marketplace does give more choices and can offer subsidies greater than the employer contribution, said Shawn Pynes, San Diego-based head of the employee benefits division of Barney & Barney, a Marsh McLennan Insurance Agency.
“The weight of these various options contributes to employee’s decision regarding whether to take their company’s insurance or to seek other options,” Pynes added.
Opting out of coverage altogether means consumers are subject to fines. Starting in 2016, the fine increases to $695 per person or 2.5% of his household income, whichever is greater. The maximum penalty is the cost of the national average for a bronze plan’s premium, according to Healthcare.gov.