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March 28, 2019 The health insurance mandates of the Affordable Care Act (ACA) have changed since President Donald Trump took office. Many small business owners are confused and have questions about whether or not they have to offer health insurance to their employees. In 2018, small businesses with fewer than fifty full-time equivalent employees are not required by law to provide health insurance to their workers. These topics will show you how to determine if you need to provide health insurance and walk you through your health benefits options: Do Small Businesses Need to Offer Health Insurance? What Is an Applicable Large Employer? What Health Benefit Options Are Available for Small Businesses? Why Should Businesses Offer Health Insurance? Do Small Businesses Need to Offer Health Insurance?Small businesses don’t need to offer health insurance to employees under the ACA. In fact, no business is forced to pay insurance in the US; instead, large businesses that don’t comply with insurance coverage stipulations in the ACA have to pay a no-coverage penalty to the IRS on their tax filing. In 2018, only businesses with fifty or more employees are required to provide full-time equivalent employees and their family members or other dependents with minimum essential health care coverage. Of the services covered, it’s the employer’s responsibility to pay for at least 60 percent of the insurance coverage. Small Business Health Care Tax CreditSmall businesses, on the other hand, have no requirements to offer any health insurance coverage to employees. However, if a small business opts to offer health insurance coverage to employees, it may qualify for the Small Business Health Care Tax Credit. To be eligible for the credit, your small business has to meet the following criteria:
Small businesses can apply for the tax credit when filing their income taxes. What Is an Applicable Large Employer?Under the ACA, an applicable large employer (ALE) is defined as any business that employed fifty or more full-time equivalent employees for six months or longer in 2017. To determine if your business meets the criteria of an ALE, you need to count your full-time employees as well as the full-time equivalent of your part-time employees.
If the combined total of full-time employees and full-time equivalents is fifty or more, your business is considered an applicable large employer. What Health Benefit Options Are Available for Small Businesses?Although small businesses don’t need to offer health insurance, many opt to do so to keep their employees happy and healthy and to attract new workers. Here are some of the most popular health benefits options available to small businesses:
Why Should Small Businesses Offer Health Insurance?Small businesses may choose to offer health insurance to employees because it offers benefits both to workers and the company. Here are some of the top benefits to offering health insurance as a small business: It Keeps Employees HappyOffering health insurance benefits to your employees can keep them happy and help with employee retention. It can also help attract new employees to your company. According to a recent survey by Glassdoor, health insurance coverage is the most important benefit for employee satisfaction, ahead of vacation and pension plans. It Boosts Employee ProductivityWorrying about healthcare coverage and neglecting preventative care because of healthcare costs can lead to stress and illness, both of which lower employee productivity at work. According to the Center for Disease Control, healthier employees are more productive and are less likely to call in sick for work. Offering health care coverage to employees can reduce stress levels and encourage workers to get the care they need to maintain their health and stay productive. It Saves You Money At Tax TimeEmployer health-care premiums are tax exempt, which can greatly reduce or even erase your tax obligations. Your contributions are also tax deductible, meaning you can write off the cost of employer-sponsored contributions during tax season. By offering employee health insurance, you may also qualify for the Small Business Health Care Tax Credit. It Gives More ChoiceGroup health insurance often offers access to hospitals and doctors that aren’t available to people with individual health plans. These hospitals and doctors are often more in demand and considered better than those available through individual plans. RELATED ARTICLES Do employers have to offer health insurance NJ?Employers are not required under state law to provide health insurance. However, it is still highly advised that you do so. The only “insurance” that state law requires most businesses (except for sole proprietorships and single member LLCs with no employees) to pay into is Worker's Compensation.
Do employers have to offer health insurance in Colorado?In Colorado, all employers with 50 or more full-time employees are required to offer some form of health insurance benefit. Once you have 50 employees, you are considered a large employer. This means that you may face penalties if you do not offer health insurance.
Do employers have to offer health insurance in Wisconsin?By law, small employers don't have to offer health insurance as a benefit to their employees. Many do offer health insurance to help attract and keep good workers. The Wisconsin Office of the Commissioner of Insurance has a guide with details on the Small Employer Health Insurance Law, terms, and possible costs.
Do employers have to offer health insurance in Ohio?Coverage Provided by Employers
Most Ohioans get health insurance coverage through their employers . It is important to understand, however, that employers offer insurance voluntarily — no law requires it . The employer may offer insurance that covers you only, or may offer coverage to you and your dependents .
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