The Affordable Care Act (ACA) passed in 2010 and outlines health care
options and requirements for employers. The number of employees your business
has dictates whether you need to provide health insurance and determines what
tax advantages your company qualifies for.
If you have 50 or more full-time equivalent (FTE) employees, you’re a
large business. As a large employer, you’re required to provide health care
options to your staff. If you don’t, you may face steep penalties.
If you have fewer than 50 FTE employees, however, you’re considered a
small employer. As such, you’re not required to provide health coverage for
your team and can even take advantage of certain tax breaks.
As a small business, you may be eligible to use the Small Business Health Options Plan (SHOP) to provide health and dental coverage to your workforce. By enrolling in SHOP, you may qualify for the Small Business Health Care tax credit, which lowers premium costs for qualifying companies.
Once you have 50 FTE employees, the rules change, so make sure you remain
compliant to avoid getting fined. To stay compliant, consider offering health
insurance now because there are options for your company, no matter how big it
is. Besides helping you stay compliant as your business grows, providing health
insurance before you’re required to can help you attract highly qualified
workers to your organization.
Learn more about what insurance options your small business can consider or speak with an insurance broker to find out what options are available to you.
Each contributor on the Workful Editorial Team holds an advanced degree in business-related studies and/or communication and has written for other small business publications, including SmallBizDaily, HR.com, and Business.com. The information in this article is based on thorough research and has been edited for accuracy and timeliness by Workful’s Human Resources experts. While this blog is meant to inform and educate small business owners, it is not intended to provide legal, financial, accounting, or tax advice.