EMPLOYEES & HUMAN RESOURCES • October 5, 2016
2 minutes Read
If you own a small business, the discussion and debate about health care isn’t just a bunch of buzz on the news, it’s an urgent question. Regardless of the industry you’re in, you need to consider it.
Eventually, you’ll likely ask yourself whether you should offer employees health care.
One of the strongest arguments in favor of doing so is that you’ll attract and retain better employees. If you’ve experienced high turnover or, alternately, have been fortunate enough to work with loyal and talented people who help you achieve your business goals, you know how valuable a good employee can be. With this in mind, health care is a relatively small expense to keep them happy and working for you.
Employee health care plans are expensive, though, and it can be hard for smaller companies to find the resources to cover the costs. In 2015, the average monthly premium for single coverage in an employer-sponsored health insurance program was $521; for family coverage it was $1,462, according to the 2015 Henry J. Kaiser Employer Health Benefits Survey. That’s $6,251 and $17,545 per year, respectively.
Health-care expenses are real, and they keep rising.
As a result, the government offers many incentives for small businesses to offer health care to employees, making possible major tax deductions and allowing some businesses to qualify for a tax credit.
Deciding on a plan
If you employ fewer than 50 people, the first place you should look for an affordable and effective health insurance plan is the Small Business Health Options Program (SHOP) Marketplace. Despite the poor reputation the government’s health-care websites may have, navigating this site is surprisingly easy. You can look through plans and prices available in your state, learn about tax credits and deductions, and much more.
Additionally, if you employ fewer than 25 people and purchase a plan through SHOP, you may qualify for a Small Business Health Care Tax Credit that may be worth as much as 50 percent of your premium costs.
If you buy insurance through SHOP, there are guidelines regarding which employees qualify. As a rule, anyone who pays payroll taxes is eligible for insurance benefits. If an employee offers group health-care coverage to any full-time employee (defined as anyone working more than 30 hours per week), they must offer it to all full-time employees. Likewise, if an employer offers it to any part-time employees (anyone working 20–29 hours per week), they must offer it to all part-time employees.
Whether you are able to extend health insurance benefits to part-time employees depends on your budget, how your workforce is structured and how important it is for you to attract and retain those employees.
For more information about managing your small business, be sure to check out the many resources CAN Capital has available.
Photo credit: Tashatuvango/shutterstock.com
IMPORTANT INFORMATION: This is not investment, tax, or legal advice. Should you have questions, please consult your own attorney, tax accountant, or other appropriate expert having expertise in the area of your question or before making important decisions in these areas.