Group Health plans are offered by businesses to cover their employees and families. A business must have at least 2 people to be eligible for a group plan. Group plan rules were modified as result of the Affordable Care Act.
Am I required to provide health insurance to my employees?
Not if you have 50 or fewer full-time equivalent (FTE) employees. You can choose to offer insurance through a group health plan or the SHOP Marketplace. But you don’t have to, and you don’t face a penalty if you don’t.
What if I have at least 50 employees? What is the penalty for not offering minimum coverage?
To be subject to the Employer Shared Responsibility provisions for a calendar year, an employer must have employed during the previous calendar year at least 50 full-time employees or a combination of full-time, part-time, and seasonal employees that equals at least 50. The calculation of the penalty is complex but can be substantial and should be researched by a qualified health insurance expert.
What is the Small Business Health Care Tax Credit?
To qualify for the tax credit, all of the following must apply:
- You have fewer than 25 full-time equivalent (FTE) employees
- Your average employee salary is about $50,000 per year or less
- You pay at least 50% of your full-time employees’ premium costs
- You offer coverage to your full-time employees through the SHOP Marketplace
The tax credit is worth up to 50% of your contribution toward your employees’ premium costs (up to 35% for tax-exempt employers).
You don’t need to offer coverage to your part-time employees (those working fewer than 30 hours per week) or to dependents to qualify for the tax credit.
The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less. The smaller the business, the bigger the credit.
What about HRAs (Health Reimbursement Arrangements) and HSAs (Health Savings Accounts)
Many employers are looking to higher deductible plans that incorporate HRAs and HSAs. These concepts can help create great premium savings and are well worth researching.
Can anyone make sense of all this?
There is a large volume of information and rules regarding health insurance for businesses. Our agency can help you sort through much of this data and try to obtain the best coverage at an affordable price.