Do Small Businesses Have To Offer Health Insurance?
Between managing finances and overseeing multiple employees, small business owners often wonder if offering health insurance is necessary. While it’s not always required, providing health coverage can be a helpful option for both the business and your team.
Understanding what’s legally required and exploring the benefits of private health insurance plans can help you make the right choice for your company.
Legal Requirements for Small Businesses
Per the Affordable Care Act (ACA), small employers with less than 50 full-time equivalent employees (FTEs) do not have to offer health insurance. This means they aren’t subject to the employer mandate for larger companies.
Employers with fewer than 50 employees who still want to offer health insurance might consider a Small Business Health Options Program (SHOP) plan. These plans allow smaller companies to choose from various coverage options while qualifying for tax credits, provided the plan is offered to all eligible employees.
Businesses with 50 or more FTE employees are required to offer health coverage that meets minimum essential coverage standards. It must also be considered affordable based on employee income, or the business may face penalties for non-compliance.
Why Small Businesses Might Still Offer Health Insurance
Even if your business isn’t required to offer health insurance, there are still good reasons to consider small business health insurance plans. Here are a few benefits for your company and its employees:
Attracting and retaining talent. Offering health insurance can give small businesses an edge in a competitive job market. Employees often prioritize benefits like preventive care and dental coverage, helping companies attract and keep top talent reducing turnover and recruitment costs.
Tax incentives. Small businesses with fewer than 25 FTE employees and an average wage under $56,000 may qualify for the Small Business Health Care tax credit, which covers up to 50% of premium costs, making insurance more affordable.
Improved employee wellness. Health insurance provides access to medical care, preventative screenings, and behavioral health services. Health insurance plans for small businesses can improve employee health, reduce absenteeism, and boost productivity and employees’ overall well-being.
Affordable Solutions for Small Businesses: Private Small Business Insurance
Private health insurance options offer an alternative to public programs like SHOP. Affordable private health insurance plans can be an excellent choice for new businesses or those seeking a more budget-friendly way to provide employee coverage.
With private insurance, businesses can enjoy flexible, customizable plans tailored to their needs, often at competitive rates. Our United National Healthcare private insurance plans cater to companies in specific industries, offering specialized coverage options such as:
Coffee shops: We provide coverage that supports the unique needs of food service businesses, including health benefits for part-time staff and affordable premium options.
Trucking company owners: Our plans offer flexibility for independent truckers or small fleets, with coverage that can include health care during long trips or out-of-state work.
Private practices: Designed for medical professionals, our plans ensure comprehensive health coverage for practitioners and staff, with dental and vision care options.
Real estate agencies: Customized for agents and small teams, our insurance offers affordable plans that meet the needs of commission-based workers who require flexibility in their coverage.
Plumbing businesses: We provide affordable group plans for trade workers, including options for coverage of injuries or health concerns that may arise on the job.
Decide if Offering Health Insurance Is Right for Your Business
Choosing the right health insurance depends on your business’s size, industry, and budget. Whether you’re asking questions like “How much is insurance for a coffee shop?” or “What are the options for covering my trucking team?”, considering the following can help you decide on your plan:
Cost: Evaluate the total expenses, including premiums, deductibles, and any additional fees that could impact your budget.
Compare monthly premiums and out-of-pocket expenses
Check for hidden fees or administrative costs
Estimate how much your business can comfortably afford
Employee Expectations: Understand the types of coverage employees value, such as preventive or family care.
Survey employees to identify their preferred coverage
Consider the value of adding dental, vision, or family plans
Gauge the importance of wellness programs or mental health coverage
Customization: Look at how flexible the plans are in meeting specific business and industry needs.
Identify industry-specific needs like job-related injury coverage
Ensure plans can adjust for part-time and full-time staff
Check if mental health or specialist coverage can be added
Tax Incentives: Explore eligibility for tax credits or deductions that could offset the cost of providing insurance.
Confirm if your business meets tax credit eligibility for individual or group health plans
Calculate potential savings based on employee count and wages
Understand the requirements to maintain eligibility over time
Find Customized Health Insurance at United National Healthcare
While small businesses are not always required to offer health insurance, the potential benefits make it worth considering. Understanding the options and choosing the right approach for small business owners can lead to a healthier, more productive workforce and a thriving business.
If you’re thinking about offering health insurance, consider United National Healthcare. Our insurance company provides multiple small business health plans that offer affordable, quality coverage.
Speak with a team member today to get a quote. Explore your options with United National Healthcare and find the best solution for your business.
