Do Small Businesses have to offer Health Insurance?
This post was written for Small Businesses – it doesn’t go into detail regarding medium or large businesses.
I tend to focus most of my time on smaller businesses and how they incorporate health insurance into their business, so a question I often hear from employers and employees alike is; “Do Small Businesses have to offer Health Insurance? We have 25 employees and I have heard some businesses are facing penalties because of their lack of health insurance.” The answer to that specific question is no, with 25 employees you would not be required by law to offer insurance to your employees; to be quite brief, any company in 2015 that has under 80 full time employees (technically 99, but only if they have no FTEs, Full Time Equivalents) will not be penalized (the first 80 employees in 2015 are waived). However, the Employer Mandate law (the law that penalizes larger companies for not providing their full time employees with coverage), also coined as the “Pay or Play” law is much more complicated than what I have just stated above (companies have to count their “full time equivalents” and use an equation to determine if the law will affect them or not, as well as other laws regarding overseas employees and seasonal employees), but because you came here because of the title, “Do Small Businesses have to offer Health Insurance”, I will assume you are a small business and just say that if you have 80 or fewer full time employees, then you will not be penalized. If you have more than 80 full time employees then you can read up about the Employer Mandate online or talk to your broker (I will have a post soon enough regarding the topic for larger groups, but currently, I do not).
If you are a large employer and are trying to figure out what to search to find out if you will be penalized by the legislation, try searching for “The Employer Mandate” or “Pay or Play Rules”.
Small Businesses – You are in the Clear, but remember the Advantages of having Benefits
Although small employers are not subject to the Employer Mandate penalties (for 2015), you will still be at a disadvantage if you don’t offer health insurance. The survey’s these days always conclude that a significant portion of full time employees retain their jobs because they love the benefits they receive, and because of the benefits, they will stay at the company. Just keep that in mind, because small businesses are in more need than large businesses for superior human capital!
Thank you for reading, and have a great day!
Additional Disclaimer – Although I am an Insurance broker and a professional in the field, the Health Care laws are ever changing, especially in the age of the Affordable Health Care Act, and the laws, information, opinions, or understandings that I have wrote about may be obsolete by the time you come across them and I take no legal responsibility for what actions you may or may not take because of it. To keep yourself safe, please seek updated professional advice, because changes are happening and I would like to keep everyone safe from any misleading or dead information. Please check out the “Terms and Conditions” page for more information and/or bookmark my blog for upcoming changes and updates to the ACA. Thank you for reading, and have a great day!