Are Small Businesses Required to Provide Healthcare for Employees?

Are you considering putting up your own small business. One of the things you must consider is your obligation to your prospective employees.

Many people have opted to leave their jobs and establish small businesses, or have small businesses while having day time jobs. As a very flexible way of earning more income, small businesses have been multiplying in the past years.

Having a small business has a number of great advantages. For one, you can be your own boss. You have your time in your hands; you decide which kind of business you want to run, where you want to run it, and so on. Being your own boss can be fun, however, it is not without its challenges. Being an employer requires you to provide a number of things for your employees.

Generally speaking, small businesses are businesses that have up to 50 employees. In some industries, there are businesses with more employees which can still be categorized as a small business. If you want to know if your business is still considered a small business, you can research on U.S. SBA’s size standards which basically show the number of employees a business should have for it to still be considered a small business.

Employee Benefits for Small Businesses

Is providing health care for employees required when running small businesses? The answer is no. According to the Affordable Care Act, small business employers are not required to provide health insurance for their employees. Businesses with more than 50 full-time workers, however, are no longer under the small business category and are therefore required to provide health care for their employees.

However, you may qualify for a small business tax credit if you provide insurance for your employees. A standard that can be set as an example is if you have 25 employees and your business pays average annual wages below $50,000, you can get up to 35%(25% for non-profit businesses) to offset the cost of your insurance if you provide health insurance. One thing to look forward to is when the plan for the small business tax credit goes up to 50% (35% for non-profit businesses) in 2014.

When you are looking for health insurance for your employees, keep in mind that health insurance companies are not allowed to turn your business down based on the health condition and status of your employees or their family members if you have 2 to 50 employees in your business. Your insurer must also accept everyone in your group, including the employees’ family members (should you offer dependent coverage) regardless of their health conditions.

Starting in the year 2014, the Affordable Insurance Exchange will be available for all kinds of small businesses. This Exchange is a new, transparent and competitive market place that offers affordable and qualified health benefit plans. It allows small businesses to have better choices for lower prices when it comes to employee coverage.

Read more about small business employee coverage on http://www.healthcare.gov/using-insurance/employers/small-business/index.html.