Understanding Employer Health Insurance Requirements

As a small business employer, you may be wondering what your health insurance requirements are. Questions that may arise like, what are the criteria your small business needs to fulfill to offer health insurance? Or, what are your insurance obligations toward your employees?

Are employers required to offer health insurance?

The provisions of the Affordable Care Act (ACA) determine whether an employer is required to offer health insurance or not. In most states, small businesses with fewer than 50 full-time or full-time equivalent (FTE) employees have no legal requirement to offer health insurance. Yet, many small business owners do attract and retain good workers. As a small business owner if you decide to offer medical coverage, you will have to meet the following health insurance requirements such as:

  • The health insurance coverage must be offered to all full-time employees. Typically, full-time employees are defined as those who work 30 or more hours per week on average.

  • A small business has no obligation to offer health insurance to part-time employees (usually defined as employees who work less than 30 hours per week on average).

What contribution level or premium cost-sharing requirement applies to employers with small businesses?

Group health insurance plans are a form of employer-sponsored coverage. This means that a business is required to share the cost of group health insurance with employees. If you opt for a group health insurance plan, employers are required to contribute or pay at least 50% of each employee’s health insurance premium, although this may vary, depending upon the state in which your business is located.


Are employers required to offer health insurance to employee dependents?

If you offer group health insurance, you also must allow plan-eligible employees to cover their dependents. Dependents include spouses, in some cases unmarried domestic partners, and children. Under the Affordable Care Act, group insurance plans are required to extend coverage to dependent children through age 26. Generally, dependents cannot enroll for coverage unless the employee has enrolled. Though, you are not required to contribute to dependents’ health insurance premiums.

Summary of employer health insurance requirements

Small businesses with fewer than 50 employees are not required to offer health insurance, many do so. Most workers highly value group health coverage, especially as of late. An employer who offers group health insurance may benefit from business tax deductions to help offset some of the cost associated with offering group health insurance.

Our licensed health advisor can help you learn more about employer health insurance requirements and ensure you find the right group health plan for your business. Contact Paroubek Insurance Today!