Suzanne Lucas

How Health Coverage Changes as Your Company Grows

Health coverage is a difficult and expensive part of any business. You can’t attract good employees without good health care, and the evolving legal landscape means that the required coverage may change. That’s difficult for small businesses to navigate. But what happens as your business grows? Some of it’s good, some of it’s bad.

Minimum Number of Employees

Right now, you’re not required under federal law to pay an employer part of health insurance until you reach 50 full-time equivalent employees, according to the IRS. You can offer health care coverage when you have fewer employees, but once you hit 50 people, you’re required by law. That’s a big number for any employer, so keep your eye on that number as your company grows.

Different Plans for Different Locations

As you grow, you might open additional locations. If they’re all in the same city, it’s probably the same. But, if the purpose of your expansion is to increase your customer base, you’ll eventually end up with offices in more than one city or state. The same health care plan may not work in that area. Even if your plan technically covers the new office in the city across the state, make sure there are doctors and hospitals there that accept the plan. Health insurance without any access to doctors isn’t really providing coverage for your employees.

Insurance laws and regulations change from state to state, so when you enter the market in your second state, find a plan that works in both states or offer two different plans. Before you move into the new state, speak to a health care broker in the area so you know what to expect.

Employee Demographic Changes

You may have opened your business with a few friends from college. That’s great, but as you expand, your company won’t be made up of people who are at the same life stage as you are. You’ll start to build a more diverse workforce, and you could end up with a mix of people who are older, younger, single, married, with children and without children. As your business changes, take a look at your insurance and make sure it covers the things your employees need. Don’t assume the plan you signed three years ago when you had 20 employees who were all in their 20s now works for your 75 employees that range from ages 18 to 62.

If you’re not sure what the impact will be on your health coverage plan, ask. Take the time to meet with a health care broker or hire a consultant to help you plan these things out. It’ll help you avoid any costly mistakes during growth periods.

Suzanne Lucas spent 10 years in corporate human resources, where she interviewed and hired employees, managed the numbers and double-checked with the lawyers. Her writings have appeared in Inc. Magazine, CBS MoneyWatch, US News, Readers Digest and other publications. She focuses on helping businesses nurture great employees and helping employees enjoy great careers.