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When Does My Small Business Need to Offer Health Insurance?

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If you are a small business owner, the health, safety, and well-being of your employees are your priority – and, to an extent, your responsibility. Undoubtedly, upholding the highest workplace safety standards is essential, but there is much more that you can do to look after the mental, physical, and financial well-being of your team – in and out of the work premises!

Offering comprehensive health insurance coverage or health benefits (even if you are not legally required to do so) is a great way to attract the best talents and create a healthier workplace for all. Here’s a quick-start guide for small business owners.

Does Your Business Need To Offer Health Insurance?

With the introduction of the Affordable Care Act (Obamacare) 2010, some businesses are required by law to offer health insurance to their employees. The law specifies that applicable large employers (ALEs) who have 50 or more full-time equivalent workers (who work at least 30 hours a week or at least 130 hours a month) are required to offer health insurance.

If you run a small business that employs less than 50 full-time employees, you are exempt from having to provide health insurance. And yet, according to the Kaiser Family Foundation, over 31% of small businesses – or nearly 1 million American small firms – with fewer than 50 employees offer some health coverage.

While this percentage is lower in businesses with 2-15 employees, the majority of small businesses that are looking to grow or employ 16-50 employees offer some health benefits. The budget might be tight at all stages of a business, but investing in health insurance is a small price to pay to attract some of the industry’s top talents!

When Should You Offer Health Insurance to Your Employees?

So, your small business might not be required by law to guarantee Health Insurance to your employees. But this doesn’t mean that you shouldn’t!

As political administrations change, it is likely for the laws concerning employee health insurance to change too. Because these changes can be sudden and unexpected, it is important to have a framework in mind to keep your business compliant. Ideally, you should work in partnership with legal experts and HR professionals to understand whether your business would offer health insurance under the ACA.

Additionally, since the scheme’s introduction in 2015, many small businesses have voluntarily participated in the ACA’s Small Business Health Options Program (SHOP). The SHOP allows small firms to pool in with other businesses and access affordable state-based health insurance policies.

4 Benefits of Offering Health Insurance to Your Team

As seen above, small businesses with 50 full-time employees or fewer aren’t required to invest in employee health insurance. But choosing to do so can bring some unmissable benefits. These include:

  1. Attracting top talent – as the Great Resignation rages on, businesses are scrambling to attract and retain top talents. On the other hand, professionals have raised their expectations, now looking for higher compensation and greater benefits. Offering health insurance can help your business stand out against the competition.
  2. Aligning with the industry’s standards – recent studies show that 84% of employees and 71% of HR professionals believe that companies will focus more and more on guaranteeing their employees’ financial, mental, and physical wellbeing. Offering insurance today can help your business keep up with an always-changing market.
  3. Supporting a healthier workplace – providing health insurance to your employees can be a smart move to create a workplace that is healthier overall. After all, today, over 50% of Americans skip or delay medical care because of the associated costs. Providing medical insurance allows them to take the best care of their body and mind without having to worry about their finances.
  4. Streamlining your tax strategy – thanks to the SHOP exchange and the Health Care Tax Credit for Small Employers allows you to deduct some of the costs associated with providing health insurance from your taxable amount.

When providing an insurance plan, make sure it meets the standards outlined by the ACA and it becomes available to employees within 90 days of hiring them.

Other Benefits To Look After the Health and Wellbeing of Your Employees

When it comes down to looking after your employees’ well-being, investing in health insurance is only one piece of the puzzle. When taking a holistic approach, you might also consider focusing on disease prevention and overall health, providing your employees with:

  • High-quality health and safety training
  • gym membership
  • Rewards for cycling to work
  • Yoga and meditation classes
  • mental health counseling

Unsure what benefits your employees would value the most? Just ask them!

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