California Health Insurance

Small Business Health Insurance Questions

Q:  Are employers required to provide insurance to their employees?

The new health care law, the Affordable Care Act, does not require small employers to offer health care coverage.  Employers with 1-50 eligible employees will not be subject to penalties for not providing health coverage.  However, there are many advantages to the employer.  These include:   Employee Loyalty & Retention, Productivity, Tax Advantages, Budget Control, and Aggregate Billing.   

Q:  What is an eligible employee?

An eligible employee works an average of 30 hours per week based on a month of work.  You may decide to offer coverage to part-time employees who work between 20 and 29 hours per week.   Ask your Certified Insurance Agent for a complete list of eligibility guidelines.

Q:  What happens if I do not cover my employees?

Businesses with 50 or fewer eligible employees are not subject to penalties if they do not provide health coverage to their employees.  Businesses with greater than 50 eligible employees are not subject to tax penalties for the 2014 tax year.

Q:  How much does health insurance cost the small business owner?

The employer cost of offering health insurance depends on several choices the employer will make.  These include: 

1. The level of coverage – bronze (60%), silver (70%), gold (80%), or platinum (90%) -offered to the employees.  This is known as the “tier” or “metal tier”.
2. The “Anchor Plan” or sometimes referred to the “Benchmark Plan” the employer chooses to base their contribution on.  Employers will choose a specific plan within their chosen metal tier to tie their contributions to.
3. The percent of premium the employer chooses to contribute to employee premium costs as a percent of the cost of the anchor plan.  
4. The amount the employer chooses to contribute to dependent coverage (if offered).   

Q:  How much is a small business owner required to contribute to employee premiums?

To participate in Covered California's SHOP, employers must contribute a minimum of 50 percent of employee-only premium amount of their selected anchor plan (or reference plan). (Source: CoveredCA.com)