Question
Our company hires individuals who are in the U.S. on H-1B or J-1 visas for certain positions. Is our company required to provide healthcare coverage to these employees? If so, what type of coverage?
Answer
Yes, employers must provide H-1B visa workers with the same healthcare coverage as similarly employed U.S. workers; however, J-1 visa holders are responsible for maintaining adequate health insurance that meets specific minimum requirements for the duration of their stay in the U.S.
Types of visa holders
Several types of visa holders work for U.S. employers, with two primary classifications being H-1B and J-1.
The H-1B visa is a temporary (nonimmigrant) visa allowing employers to petition for highly educated foreign professionals to work in “specialty occupations” that require at least a bachelor’s degree or the equivalent. Specialty occupations that qualify are often in the fields of mathematics, engineering, technology and medical sciences. Typically, the initial duration of an H-1B visa classification is three years, which may be extended to a maximum of six years. The number of H-1Bs made available each year is limited.
J-1 nonimmigrant visas are provided to individuals entering the U.S. under the Exchange Visitor Program to teach, instruct or lecture, study, observe, conduct research, consult, demonstrate special skills or receive training in an approved program — or to receive graduate medical education or training. J-1 visa holders are sponsored by U.S. Department of State-designated exchange programs. These programs are designed to promote the interchange of persons, knowledge and skills in the fields of education, arts and science. The J-1 visa is not a general work visa. So, typically employment is incidental to the exchange program’s main purpose. The spouse and any minor dependent child of a J-1 visa holder may be issued a J-2 visa.
Health insurance requirements
Each type of visa holder — H-1B or J-1 — has different health insurance requirements.
H-1B visa holder benefits
H-1B visa holders hired to work in the U.S. must be offered healthcare benefits on the same basis, and using the same criteria, as the healthcare benefits the employer provides to similarly employed U.S. workers.
Note: Employers must also provide H-1B visa holder employees the opportunity to participate in such programs as life, disability and other insurance plans; retirement and savings plans; cash bonuses; and non-cash compensation such as stock options (performance-based or not).
J-1 visa holder benefits
Federal regulations require all J-1 visa holders to maintain “adequate health insurance” for the entire duration of their stay. This is to ensure a minimum standard of coverage is applied to protect exchange visitors from the high costs of U.S. healthcare. The following minimum requirements must be met for all J-1 visa holders:
- Medical benefits of at least $100,000 for each accident or illness
- Medical evacuation in the amount of $50,000, should the visa holder need to be sent home on the advice of a doctor
- Repatriation of remains in the amount of $25,000, should the visa holder die while in the U.S.
- Policy coverage for the entire duration of the visa holder’s J program (beginning on or before the date the J program starts, with no breaks)
- Minimum 75% coverage for each accident or illness
- Maximum deductible of $500 per condition per plan year
- A preexisting “wait period” limitation of no more than six months
In addition:
- The policy must be backed by the full faith and credit of the visa holder’s home country government (for those covered by their home country's national insurance plan), or the company providing the insurance must meet minimum rating requirements established by the U.S. government (e.g., an A.M. Best rating of "A–" or above; an Insurance Solvency International, Ltd. rating of "A-i" or above; a Standard & Poor's Claims-paying Ability rating of "A–" or above; a Weiss Research, Inc. rating of B+ or above)
- All exchange visitors and any accompanying dependents may also be subject to the requirements of the Affordable Care Act
- The policy must be in English
The above requirements also apply to all accompanying J-2 dependents, including the J-1 visa holder’s spouse and minor children.
While an employer may offer healthcare coverage to J-1 visa holders and their dependents, it is not required. J-1 visa holders must consider the above health insurance requirements before enrolling in employer-sponsored healthcare coverage. For example, health savings account (HSA)-qualified high-deductible health plans (HDHPs) typically do not meet the J-1 health insurance requirements. This also means that J-1 visa holders cannot have an HSA, which is dependent on being enrolled in an HDHP and not being enrolled in a non-HDHP.
Note: Employers also are not required to provide other types of employee benefits such as life, disability and other insurance plans; retirement and savings plans; cash bonuses; and non-cash compensation such as stock options (performance-based or not). If the J-1 visa holder is employed under an authorized category (e.g., intern, trainee, summer work/travel), the employer may offer standard benefits such as health insurance, retirement contributions or paid time off, provided the work is authorized and the program sponsor is compliant with the approved visa program rules. Offering benefits for work outside the approved program or without program sponsor approval violates the J-1 visa rules.
Takeaways
- Companies employing H-1B visa holders to work in the U.S. must provide healthcare (as well as other employee benefits) on the same basis, and in accordance with the same criteria, as the benefits the employer provides to similarly employed U.S. workers
- Companies employing J-1 visa holders to work in the U.S. are not required to provide healthcare (or other employee benefits) to those employees
- Companies considering hiring visa holders to work in the U.S. should consult legal counsel