Dylan Murray

Offering Health Insurance to Your Employees While Growing

As your business grows, offering health insurance will become an important factor in building a successful workforce. If you’ve got 49 full-time employees (FTEs) and you’re about to hire one more, you’ll fall under a new category of the Affordable Care Act (ACA). As an employer of more than 50 full-time workers, you’re now subject to a part of the ACA called the employer mandate.

What’s the Employer Mandate?

Officially, the employer mandate is called the Employer Shared Responsibility provision. When you have more than 49 full-time employees, the law requires that you offer those employees an ACA-approved health insurance policy. The health coverage must cover the employee’s dependents, but covering other family members — like a spouse — is up to your discretion. Prior to 2016, the employer mandate only applied to businesses with more than 99 FTEs.

But today, if you have more than 49 people working for you, with each working more than 30 hours per week, then you must provide health insurance. However, you don’t have to offer health insurance to your part-time employees.

How Much Will This Cost?

According to Covered California, as the employer, you have to pay for at least 60 percent of the plan’s total cost. The plan will also have to be deemed affordable to the employees — the plan can’t cost your employees more than 9.66 percent of their gross income. The health plan will also have to conform to a standard of coverage set by the ACA. And while you can always decline to offer health insurance to your employees, doing so comes with a penalty by the IRS.

Who Can Help Me?

Start by reviewing Healthcare.gov to learn more about the Affordable Care Act. This website will help you get up to speed on what the government expects you to do. Once you have a strong knowledge base, contact a health insurance provider or health insurance broker. For an accurate price, you’ll need to know the zip codes and ages of every employee and dependent you want to cover on the plan. You might also do an anonymous survey of your full-time employees. Ask them to specify some preferences in health care, such as provider networks, medication coverage and wellness options. You’ll be able to find the right plans to offer your employees once you’re armed with the right information.

You’ve proven yourself to be a savvy businessperson as an employer of 50 or more full-time employees. Celebrate your success by offering health insurance. Conforming to the ACA provisions and finding the right health insurance options for your staff will take time and effort, but you’ll be rewarded with loyal and healthy workers.

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This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.

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