In today’s society, it is pretty much understood that having access to quality, affordable healthcare is more than just a “good idea.” For many people, it is essential and a crucial component of the benefits
they look for from employers is often small business health insurance.
As a small business owner in California, however, health insurance for employees might be seen as just a nice option.
But there are several reasons why small business health insurance is crucial for employees.
Making Decisions Regarding Small Business Healthcare Coverage
A common question that arises for both employers and employees in small businesses is whether those businesses are required to offer health insurance coverage as a benefit.
As one source explained it,
“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.”
Currently, only businesses with fifty or more employees are required to provide full-time equivalent (FTE) employees and their family members or other dependents with minimum affordable health care coverage. In addition, it’s the employer’s responsibility to pay for at least 60 percent of the insurance coverage.
On the other hand, those firms with less than fifty FTE employees could opt to not offer health insurance coverage, if they chose to. However, unless your business employs less than, say two or three workers, it is always a better approach to offer some level of health coverage.
The good news for smaller employers is that you may qualify for the Small Business Health Care Tax Credit that could be worth up to 50 percent of the costs you pay for your employees’ premiums.
However, enrolling in a Small Business Health Options Program (SHOP) plan is generally the only way for small businesses to claim the Small Business Health Care Tax Credit.
According to the website at Healthcare.gov, 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% 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.)
So, the question to be asked then is, “Should a small business employer offer health coverage?”
5 Reasons For Offering Health Insurance As A Small Business
It can be easy to say that, as an employer, it’s simply a good thing to provide health insurance for your workers. However, there are several more tangible and beneficial reasons for doing so, as well.
For example, hiring new employees can be costly and time-consuming. And replacing employees who leave can be doubly expensive on several levels. However, evidence suggests that providing group health insurance can play a significant role in keeping a company’s workers on board for the long run.
Here are five reasons to offer health insurance to employees as a small business owner:
1. Provides Affordable Health Coverage for Workers
A major reason many employers choose to offer group health insurance is to make medical coverage more accessible and affordable to their employees.
2. Contributes to Employee Loyalty and Retention
Offering group health insurance has been shown to help small businesses keep their top employees for the long term. Overall, workers tend to stay longer with employers who offer health insurance options as opposed to those who do not.
3. Contributes to Employee Morale and Job Satisfaction
According to a survey by Glassdoor, employees said health insurance is, by far, the most important benefit they receive from their employer. What this means for employers is that this is a key to having happy employees who are more content with their jobs.
4. Supports Healthier Employees
Having access to comprehensive healthcare via an employer-sponsored insurance plan has been shown to encourage better overall health among employees. As a result, workers take fewer sick days and absences and can retain focus and achieve more while at work. In other words, it has a direct impact on productivity.
5. Gives Workers More Choice
Employer-provided group health insurance plans typically offer access to hospitals and doctors that aren’t available through individual health plans. More choice can mean better care and more options to meet the varying needs of your employees.
It would be fair to say that there are far more good reasons to offer small business health insurance than not. And you don’t have to navigate that process alone with a call to J.C. Lewis Insurance.
Your Local California Small Business Health Insurance Partners
J.C. Lewis Insurance is a long-time, family-owned firm based in Sonoma County and we are expert California small business health insurance brokers.
We only offer California small business health insurance plans from leading health insurance carriers that are licensed to do business in California.
Along with the fact that we are experienced, professional, and local brokers, we are also licensed and certified by each of these insurance carriers. This allows us to offer coverage to individuals, families, and small group employers, in addition to Medicare supplemental and prescription drug plans for seniors.
When you’re shopping for medical insurance plan options for your employees, or for you and your family, you are likely to have several questions and concerns. We invite you to bring us your questions about health coverage insurance and want you to know that J.C. Lewis Insurance Services will help you find the right solution.