The Affordable Care Act (ACA) requires that employers who have more than 50 full-time employees provide their staff health care benefits, but what if you’re a company with a smaller team?
Offering health benefits as a smaller company can give you a competitive edge against other businesses your size, who don’t provide them. According to a Clutch study, over half of employees say health insurance is the most important benefit that impacts their job satisfaction.
Why Provide Health Care?
If you want to attract and retain top talent, offering health insurance is an appealing incentive as many employees rely on their employers for these benefits. While health insurance can be a costly business expense, it also allows you to build a healthier workforce that may need to take fewer sick days and can proactively attend to their medical needs.
“If you offer health insurance, it will benefit you because you’ll have more productive, healthier employees,” says Lisa Oyler, human resources director at Access Development, a private discount network. “People are a valued asset. Offering these benefits and educating employees on how to utilize them is an investment in workers and in their long-term health.”
How to Enroll in SHOP Insurance
The Small Business Health Options Program (SHOP) is the main method for smaller employers to provide private insurance to their employees. Enrolling in a SHOP plan is also generally the only way for a small business to claim the Small Business Health Care Tax Credit. The credit can save employers up to 50 percent of their employer contribution.
SHOP-registered agents and brokers can help you find the right plan for your company, educate employees about your coverage plan, enroll you in a plan, and manage and update your coverage after you’ve enrolled. You can see SHOP plans & prices here.
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 percent of your full-time employees’ premium costs
- You offer SHOP coverage to all of your full-time employees. (You don’t have to offer it to dependents or employees working fewer than 30 hours per week to qualify for the tax credit.)
Requirements
If you do decide to offer health care to your employees as a small business, the plan must meet the standards of minimum essential coverage.
It is also required that all eligible employees are offered health care coverage when they become eligible for coverage. There is a maximum 90-day waiting period. Be sure to disclose a Summary of Benefits and Coverage that explains what their health plan covers and what it costs.
