Is this business owner required to offer health insurance?

I have a small IT computer services company that has been running for a few months, 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 liable to pay benefits, if so, how much; second: What is the price for a group of us including me and my son (co-owners); third: what about civil servants?

I also have a part-time employee on a plan through Covered California who receives a good subsidy. What are the rules for this? Can I just give him a few extra bucks each month for his current plan? Any advice is appreciated.

Kyle: Thank you for the 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 eligible full-time employees in the previous year will be required to offer coverage to its employees to avoid being penalized under the Affordable Care Act.

However, while not required, offering employee benefits such as health 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 depending on the age of your employees, the insurance carrier, and the level of benefits you offer. A licensed insurance broker can help you get quotes and work within your budget to offer a quality employee benefit package.

Remember, however, that there is a minimum amount you must contribute to your employees’ coverage to be ACA compliant, which stipulates that coverage must be affordable. Your broker can help you make sure you meet the ACA guidelines, but as a general rule, you should contribute at least 50% of the Bronze level plan.

Tom: We have good news for your nephew who is working in Utah. A California-based company can find health insurance options for employees living and working anywhere in the US. However, insurance carriers often have some additional terms when dealing with out-of-state coverage, so be sure to check with your broker.

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

It’s very nice of you to want to contribute to their health insurance costs, but remember that any subsidy they receive from Covered California is based on their reported income. Any additional earnings they receive from you may 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 additional questions, please contact us at [email protected] or 707-255-9511.