News for Small Firm Practitioners

Small Business Dilemma: Paying For Health Care

by Kelly Phillips Erb | Aug 25, 2015   ()

Under the new health care law, sometimes called Obamacare, the “employer mandate” kicks in for businesses with 50 or more full-time equivalent employees (FTE). For purposes of the mandate, FTE includes full-time employees plus each 30 hour period worked by non-full-time workers.

With Obamacare, employers must provide health insurance to at least 95% of their full-time employees and dependents up to age 26. If employers who are required to provide health insurance and do not, they may be forced to pay a penalty of $2,000 per full-time employee, with an exclusion for the first 30 employees. Additional fees may also apply, depending on the circumstances.

The employer mandate does not apply to employers with fewer than 50 employees. According to the Treasury, approximately 96% of employers are small businesses with fewer than 50 FTE workers which means they are exempt from the employer responsibility provisions. This is good news for small businesses but that doesn’t make the health care question go away. The reality is that many small businesses still do provide health care for their employees, either out of a sense of responsibility or out of a desire to attract quality candidates (or both).


Source: Forbes
Source: Forbes

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