As a small business owner, you're responsible for a number of expenses every month. You have to pay your employees, your rent or mortgage, utilities, taxes, and any operating costs it takes to keep your company going.
Add health insurance to the list of expenditures, and you may begin to feel overwhelmed. However, small business health insurance doesn't have to be nerve-racking.
Do you have to provide health insurance?
Technically, no business is required to provide health insurance to its employees. It's only if you have more than 50 full-time equivalent employees that you must offer affordable health benefits or pay a tax penalty.
These laws are stipulated under the Affordable Care Act. If you have fewer than 50 full-time employees, you are under no obligation to offer health insurance, and you won't be subject to a penalty.
Do you want to provide health insurance?
Even if you meet the small business healthcare standards and won't get penalized, there are many benefits to providing company health insurance. If your workers have access to business health insurance and pursue care, they will be healthier and won't have to take as many sick days. You'll also attract stronger applicants, as well as help foster company loyalty.
If offering small business medical insurance is a priority for you, here are two features under the Affordable Care Act that can help.
The small business healthcare tax credit
To qualify for the small business healthcare tax credit, your business needs to employ fewer than 25 full-time workers making an average of roughly $50,000 or less per year. You must also pay at least 50 percent of full-time employees' health insurance premium costs, and offer coverage to employees through the government's Small Business Health Options Program (SHOP).
If your business is not tax-exempt, then the government will grant you a tax credit worth up to 50 percent of your contribution toward employees' premium costs. If your business is tax-exempt, then it's 35 percent.
Let's say you're running an operation with fewer than 10 workers who make an average of $25,000 a year or less. Your tax credit will be higher because the smaller the business, the higher the credit it receives.
The SHOP marketplace
Generally, the SHOP Marketplace offers health insurance for small business owners who run companies with 50 employees or fewer. In 2016, some states may have changed their SHOP requirements, so it's best to check with your state's Department of Insurance to see if your business qualifies.
When you log onto the employers' section of the SHOP website, you input your state. Then, you can browse the state marketplace to see which health plans to pursue.
If you operate out of more than one state, you can choose small business health insurance plans for your employees that come with a multi-state or national provider network.
You could also supply separate plans for each location, so long as you have an address in each state. For example, you may have 10 employees in California and only two in Washington. As long as you possess a business address in Washington, you'd qualify for that state's small business health insurance plans.
Thanks to the government, offering small business health insurance to employees doesn't have to be stressful for employers. In fact, it can be a positive course of action that will take your business to the next level and beyond.
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