When it comes to employee benefits, health insurance ranks high on the list of desirable and, to be honest, expected perks of an employer. Attracting and retaining good employees and maintaining competition in a volatile hiring environment also motivates most employers to offer these benefits.
In addition to health insurance, many employees expect to have options for both vision insurance and getting good dental insurance as well.
The challenge for all businesses, but for small business owners in particular, is the ability to “pay the bill” for these employee benefits.
California Health Insurance, Health Insurance Premiums, and ACA
For small California employers, providing health insurance options as employee benefits is a great way to compete for quality employees and increase employee retention. But it comes at a cost.
However, despite what some may believe as a result of the Affordable Care Act, or ACA, the employer is not required or authorized to provide health coverage benefits to employees.
As the Kaiser Family Foundation pointing toAnd the
“The Affordable Care Act does not require companies to provide health benefits to their workers, but large applicable employers may face penalties if they do not provide affordable coverage. Under the Shared Liability of the Affordable Care Act, employers who do not provide coverage or do not provide coverage that meets Minimum value and affordability standards. These penalties apply to companies with 50 or more full-time employees. “
“Employers must provide health insurance Affordable and provides minimal value to 95% of their full-time employees and their children until the end of the month in which they turn 26 or are subject to penalties. This is known as employer authorization.”
For employers with fewer than 50 full-time or full-time (FTE) workers, HealthCare.gov States,
“Any small business owner, generally those with less than 50 full-time employees and full-time employees, is not subject to Employer pay joint liabilityRegardless of whether they provide health insurance to their employees.”
So, the question is, if you choose to offer a California health insurance plan or options to your workers, which many small employers choose to do, how much do you have to pay for it?
The cost of health insurance benefits for small employers
If your company decides to offer health coverage to your employees, then you are typically required to pay at least 50 percent of employee premiums as a small business.
Of course, that can increase quickly if you have more than 10 employees for example.
For example, according to Kaiser Family Foundation (KFF)Last year in 2021, the average cost of employee health insurance premiums for family coverage was $22,221. The average annual premium for individual plans was $7,739.
While employers are required to pay at least 50 percent of these premium costs, it’s usually a bit more.
As determined by the KFF, in 2021 the average cost of health insurance for employers was $16,253 per year, or 73% of the premiumfor family coverage and $6440, or 83% of the individual premium.
The website at HealthCare.gov offers several Tools and calculators For employers to use in determining costs and health insurance options for employees. Additionally, employers can learn about the Small Business Health Options Program (SHOP), the online marketplace where qualified employers can find coverage options to offer their employees and where their employees can shop for insurance.
Another question employers ask when it comes to assessing the affordability of offering health insurance in California for their workers is can you deduct health insurance premiums?
While this topic is somewhat complicated, the simple answer is that the employer’s contribution in the form of employee premiums is a business expense, so these are deductible costs. To be eligible for this discount, employers typically have to pay at least half of their employees’ premiums.
Additionally, employers can also deduct contributions made to an employee health savings account (HSA). This is a type of pre-tax savings account, not a health plan, that can be used with a High Deductible Health Plan (HDHP). In general, all contributions to an employee’s HSA are a deductible business expense for the employer.
However, it is best to conduct due diligence about this and other employee health insurance benefits at a professional company such as JC Lewis Insurance.
Your local small business source for health insurance in California
JC Lewis Insurance is a longstanding family owned business of expert brokers here in Sonoma County. We offer California health insurance plans from many of the leading health insurance companies.
We are licensed and approved by each of these insurance companies to offer coverage to individuals, families, and employers in small groups, along with supplement and prescription drug plans for seniors.
When you’re shopping for vision, dental, or health insurance for your employees or for you and your family, you likely have many questions and concerns.
We understand that providing California health insurance options to your employees can be a daunting and complex task and that you will likely have many questions and concerns. At JC Lewis Insurance Services, we welcome your questions about insurance coverage and you can trust that we will help you find the right solution.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.