What distinguishes employer-sponsored insurance from the individual market in the United States?

• A. The individual market is obtained through a government program only.
• B. Employer-sponsored insurance is group coverage funded by employers with potential tax advantages; the individual market is purchased directly by individuals on marketplace plans, subject to ACA regulations like guaranteed issue and subsidies.
• C. Employer-sponsored plans require everyone to select a plan in the same network.
• D. The individual market prohibits subsidies and guaranteed issue.

Answer: (B)

Funding and regulatory framework differentiate employer-sponsored insurance from the individual market. Employer-sponsored plans are group coverage provided by an employer, with the employer typically paying part of the premium and employees often contributing pre-tax. This setup pools risk across a defined workforce and the plan is administered as a company benefit, not purchased directly by individuals.

The individual market, by contrast, consists of plans people buy on their own—usually through ACA marketplace exchanges. These plans are sold directly to consumers and come with ACA protections, including guaranteed issue (insurers must issue coverage regardless of health status) and potential premium subsidies based on income. In short, employer-sponsored coverage is group, employer-funded, and tax-advantaged; the individual market is consumer-purchased with ACA protections and subsidies.