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 some extent, your responsibility. Undoubtedly, adhering to the highest occupational safety standards is essential, but there is so much more you can do to take care of your team’s mental, physical and financial well-being, on and off the workplace!

Offering full health insurance coverage or health benefits (even if you’re not legally required to do so) is a great way to attract the best talent and create a healthier work environment for everyone. Here is a quick guide for small business owners.

Does your business need to offer health insurance?

With the introduction of the Affordable Care Act (Obamacare) 2010, some companies 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 per week or at least 130 hours per month) are required to offer health insurance.

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

While this percentage is lower in companies with 2-15 employees, most small businesses looking to grow or employ 16-50 employees offer some health benefits. Your budget may be limited at all stages of a business, but investing in health insurance is a small price to pay for attracting some of the best talent in the business!

When should you offer health insurance to your employees?

Hence, your small business may not be required by law to guarantee Health insurance to your employees. But that doesn’t mean you shouldn’t!

As political administrations change, employee health insurance laws are likely to change as well. Because these changes can be sudden and unexpected, it’s important to have a framework in mind for keeping your business compliant. Ideally, you should work in partnership with legal experts and HR professionals to understand if your company would offer health insurance under the ACA.

In addition, since the program was introduced in 2015, many small businesses have voluntarily participated in the ACA’s Small Business Health Options Program (SHOP). The SHOP allows small businesses to join other businesses and access affordable health insurance policies.

4 Advantages of offering health insurance to your team

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

  1. Attract the best talent – as the Great Resignation rages, companies are rushing to attract and retain the best talent. On the other hand, professionals have raised their expectations, now seeking higher rewards and greater benefits. Offering health insurance can help your business stand out from the competition.
  2. Alignment with industry standards – Recent studies show that 84% of employees and 71% of HR professionals believe that companies will increasingly focus on ensuring the financial, mental and physical well-being of their employees. Offering insurance today can help your business keep pace with an ever-changing market.
  3. Support a healthier work environment Providing health insurance for your employees can be a smart move to create a job that is healthier overall. After all, over 50% of Americans today miss or delay medical care due to the associated costs. Providing medical insurance allows them to take better care of their body and mind without having to worry about their finances.
  4. Streamline your tax strategy – thanks to the SHOP exchange and the Health Tax Credit for Small Employers, it 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 becomes available to employees within 90 days of hiring.

Other benefits to take care of the health and well-being of your employees

When it comes to take care of the well-being of their employees, investing in health insurance is only one piece of the puzzle. When taking a holistic approach, you might consider focusing on disease prevention and overall health as well by providing your employees with:

  • High quality health and safety training
  • Gym subscription
  • Press to cycle to work
  • Yoga and meditation courses
  • Mental health counseling

Not sure what benefits your employees would appreciate the most? Just ask them!