Do Small Businesses Have to Offer Health Insurance?

Health insurance is a key benefit for employers to offer on the market today. It provides them with a security blanket in case of medical emergencies, and can greatly relieve the stress related to potentially high healthcare expenses. Because of these benefits and other legal reasons, most companies are required by law to offer health insurance, but do small businesses have to meet that same requirement?

To answer this, let’s take a closer look at ACA business health regulations before exploring small business health insurance and a few of its many benefits.

For more information on small business health insurance or to request a quote, contact Beckham Insurance Group today.

ACA Business Health Insurance Requirements

The ACA (Affordable Care Act) has many different requirements for businesses and the health insurance policies they offer. These health insurance policies must include essential benefits or the company could face serious penalties. However, these requirements only apply to those companies that employ more than fifty full-time or full-time equivalent employees. This means that most small businesses are not legally required to provide their staff with health insurance. But should they?

Should Your Small Business Offer Health Insurance?

While small business owners are not required to offer health insurance, it is strongly advised that they do. In fact, more than fifty percent of small businesses provide their employees with health insurance. This adds value not only to the employees who benefit from the insurance policies, but also to the business owners who may receive tax advantages and other benefits.

Benefits to Offering Health Insurance as a Small Business

Everyone loves good benefits and offering health insurance as a small business is not without its perks. From lower turnover rates to more competitive recruitments, healthier workforces, lower premiums, and helpful tax benefits, let’s take a closer look at some of the top advantages of offering health insurance as a small business.

Lower Turnover Rates

When your employees are happy with their jobs, few things can tempt them to leave, but one of the strongest temptations they may face is the draw of good health benefits. Everyone faces healthcare troubles at one point or another, so it helps to provide health care benefits that offers both peace of mind and financial assistance to your employees. When your employees are receiving the benefits they need while working for your small business, they’re less likely to pursue other employment options.

Recruitment is More Competitive

Health benefits can help you not only to retain the employees you do have, but also draw in the top talent to fill your positions. Providing benefits makes your job openings much more competitive. Countless studies have been done that prove time and time again that benefits offerings can make or break a job posting. In fact, a 2015 survey found that fifty-seven percent of U.S. job candidates placed benefits, not salary, at the top of their considerations list when looking into new jobs.

Your Workforce is Healthier

When your employees have access to good healthcare resources, they are able to take care of their medical needs as they arise. They don’t need to take as many sick days because they have a solid health plan that keeps them more proactive about their health with doctor’s visits, medicines, and other key aids. This means that when sickness does hit, they’ll be able to take care of the situation better than they may be able to without proper resources.

Monthly Premiums are Lower

Generally speaking, small businesses have lower monthly health premiums than their larger competitors which means your employees end up paying less money for similar coverage. In fact, according to a recent study, average individual deductibles for small business health plans were thirty-one percent lower than average health insurance deductibles from larger companies.

Tax Benefits and Credits

Additionally, offering small business health insurance doesn’t just provide financial benefits for your employees. You also receive these benefits through tax breaks that can go a long way in offsetting the costs of your health insurance policy. You may receive reduced payroll tax benefits, tax deductions for up to one hundred percent of your monthly premium costs, and even deductions for HSA contributions from your business taxes.

Your company may also be eligible to receive ACA-provided tax credits that help you offset the cost of healthcare. To qualify for partial credit, you can have no more than twenty-five full-time or full-time equivalent employees, and if you have ten or fewer, you can receive the maximum credit percentage. Additionally, your business cannot pay more than $50,000 per employee per year, and you must pay at least half of your qualified employees’ health insurance premiums. And finally, to receive these tax credits, you must have group health insurance through SHOP (Small Business Health Options Program).

Employee Benefits Made Easy

At Beckham Insurance Group, our knowledgeable and experienced employee benefits representatives are here to help make your benefits administration as easy and stress-free as possible. Contact us today to learn more about how we can help you build a competitive and comprehensive benefits program.