Is It Against The Law To Not Provide Health Care Coverage To Your Employees?
Your employees are the heart and soul of your business. They’re the ones you look to when you need things to be done, and done fast. If you didn’t have them helping you, you’d never be able to realize your dreams.
Nevertheless, it’s no secret that employees are expensive. Alongside their salary, you have to provide a benefits package. This can include a retirement plan, but it may also include some form of health care coverage. Naturally, offering all of your employees some affordable health insurance will be extremely costly. Still, you’ll find that the majority of businesses in the US will do this.
Why? Is it illegal not to provide health care coverage?
There’s no law forcing you to provide health care coverage
Currently, no laws are in place demanding that your business provides a level of health care coverage to your employees as a benefit. However, there is a caveat relating to the Affordable Care Act. Any company with 50 or more full-time employees will face penalties if it does not offer affordable health care to its staff. There are lots of ACA reporting requirements in place as well, basically meaning you have to note the health care coverage that your employees have. If you don’t provide them with any coverage, you can face fines that are in the thousands of dollars during tax season. As such, it’s usually financially beneficial to provide health care coverage instead of facing these penalties.
So, yes, it’s a weird one. There’s technically no law, but there are incentives that almost force businesses of a certain size to provide health care benefits. What about smaller companies? Well, you’re free to do whatever you want without facing any penalty fees or anything like that.
Should you provide health care coverage as a benefit?
This brings us to a big question: should you provide health care coverage as a benefit for your employees? No law forces you to do so, and you might have a small business with under 50 full-time employees. In this case, you won’t be hit with any fines, so it will be an added cost to provide this benefit.
Nonetheless, it is a very good idea to provide this coverage. Health care is a basic human right, and many of your employees might struggle to afford insurance on their own. By offering it to them, you instantly have their eternal gratitude. They feel well looked after, which can lead to an increase in productivity and performance. Not only that, but you give your workers opportunities to get medical help if they need it. Thus, this could mean that people have less time off work because they’re able to better manage their health. From an employee turnover perspective, there’s a reduced chance of people leaving your company if you offer them health care benefits as well.
Overall, it is advantageous for your company to provide some sort of health care coverage to your employees. Especially if you have over 50 full-time employees as it is better than paying any IRS penalties!