In the U.S., many workers receive their health insurance through their work. Some people will even seek jobs that may pay less but offer benefits, but are employers required to offer health insurance by law? For small businesses, health insurance may be an expense they just can’t shoulder.
Are Employers Required to Offer Health Insurance? 3 Things to Know
The short answer is no. The longer answer is more complicated. Here are three things to know:
1. Laws Requiring Health Insurance
No law exists to require employers to cover their employees’ health insurance. However, larger companies may get penalized by the IRS under the Affordable Care Act. If your company has 50 or more full-time employees, you may pay up to $3,860 per year per employee. The 2017 Tax Cuts and Jobs Act may have eliminated penalties in 2020 for large employers who failed to offer group coverage.
2. Federal and Utah Laws
In federal or Utah law, nothing directly requires a company to offer health insurance. The laws directed towards health insurance focus mainly on what must be covered. Utah has strict mandates on what must be covered by group insurance. These standard benefits include things like ambulatory patient services, prescriptions, mental health services, and maternity and newborn care.
3. Benefits of Offering Health Insurance
For small and large businesses alike, offering health insurance has many benefits. Small businesses may qualify for a tax-credit if they offer health insurance. Big businesses can avoid any tax penalties by providing group coverage. For all companies, offering good health care coverage can bring in better employees and lower turnover rates. Health insurance can make your business a better competitor for great employees.
While there is no law that requires employers to have health insurance, offering health coverage to your employees may benefit your business. If you do offer health insurance, make sure it covers the federal and Utah standard benefits. Do you need help with other payroll and benefits questions for your business? Check out MyQualityPayroll to see our personalized services that take the hassle out of your success.