Napa's Health Insurance Guys: Is this business owner required to offer health insurance?

Dear Kyle, Alan and Tom:

I have a small computer service IT company that has been up and running for a few months now, but a number of employees are asking for health insurance. Our office is in American Canyon and employees live in the surrounding area, with one in Utah.

First: Am I required to pay for benefits, if so, how much; second: What is the cost for a group of us, including my son and I (co-owners); third: what about out of state employees?

Also, I have a part-time employee on a plan through Covered California receiving a nice subsidy. What are the rules about that? Can I just give him a few extra dollars each month for his current plan? Any advice is appreciated.

Manuel

Kyle: Thank you for your question, Manuel. For a company of your size, you are not required to offer your employees group sponsored health insurance. Only a company with 50 or more full-time eligible employees in the previous year would be required to offer coverage to their employees to avoid a penalty under the Affordable Care Act.

However, even though not required, offering employee benefits like health insurance and dental insurance can be a great way to attract and retain quality employees, even for smaller companies.

Alan: In terms of what it might cost you, the employer, that will vary based on the age of your employees, the insurance carrier, and the level of benefit you are offering. A licensed insurance broker would be able to help you obtain quotes and work within your budget to offer a quality employee benefits package.

However, remember that there is a minimum amount you must contribute to your employees' coverage to be compliant under the ACA, which stipulates that the coverage must be affordable. Your broker can assist you in making sure you stay compliant within the guidelines of the ACA, but as a general rule of thumb, you must contribute at least 50% of a "Bronze" level plan.

Tom: For your nephew working in Utah, we have good news. A California based company can find health insurance options for employees living and working anywhere in the U.S. However, insurance carriers often have certain additional stipulations when dealing with out-of-state coverage, so remember to consult with your broker.

Kyle: As for your part-time employee, he or she would likely be considered ineligible for your company sponsored health insurance, so they would be able to continue or apply for Covered California premium tax credits.

It's very nice of you to want to contribute to their health coverage costs but remember that any subsidy they are receiving from Covered California is based on their reported income. Any extra earnings they receive from you could affect the amount of subsidy they receive. As always, be sure to contact a licensed insurance broker if you are unsure or need assistance.

If you have any additional questions, please reach out to us at [email protected] or 707-255-9511.