Imagine this: You run a small internet business from home helping companies with their marketing needs. You grow steadily over a few years and wind up needing to hire someone to help you meet all your clients’ needs.
Whether you need help with accounting, gaining business or administrative tasks, someone needs to come in and help take some of the weight off your shoulders.
You decide to start off with one employee and you wonder if you need to provide them with health insurance. Down the road, you hope to expand to 10-15 employees. Do you now need to cover them?
Here’s what you need to know….
Health insurance for small business owners
According to Healthcare.gov, businesses with 50 employees or less do not need to provide health insurance. It doesn’t mean you can’t, you’re just not required to under the law.
Healthcare.gov states that if you do wish to provide coverage for your employees, you can use the Small Business Options Program (SHOP). You decide on the coverage you want to offer and how much you’ll pay towards premiums.
If you have less than 25 employees, you may qualify for a small business health insurance tax credit through SHOP. The tax credit is up to 50 percent of what you decide to pay towards your employees’ premiums, reducing your overall expense.
The benefits that come with providing your employees with health insurance are significant.
You’ll get better, more qualified applicants applying for the job, your retention rates will be higher and your employees will miss less work because they can take preventative measures from getting sick.
Employees without health care coverage tend to avoid going to the doctor, making them more susceptible to everything from the common cold to more serious illnesses.
Looking for a job is oftentimes very stressful and can be a long process for job seekers.
Health insurance considerations for job seekers include using COBRA insurance, getting coverage under a family member’s plan or buying short-term insurance. All options will tide you over until you are employed again. If you wind up working for a small business that chooses not to provide coverage, you’ll have to get your own private health insurance plan.
If you’re still deciding whether or not to provide health insurance to your employees, you’ll have to effectively weigh the pros and cons to see if it’s worth it.
Though you will attract better candidates by providing insurance, you unfortunately may not be able to afford to offer it right now. That’s ok.
You can always decide to provide it to your employees at a later date when finances aren’t as tight. Or you can wait until you’ve reached X number of employees to start offering it.
Whatever you decide to do, make sure you extensively do your research regarding small businesses and health insurance either way.
You don’t want to break any laws, nor do you want to spend an arm and a leg on coverage.
Talk to other small business owners and ask what works best for them. Though what they do might not be what you end up doing, it’s always good to explore your options.
Photo credit: Image courtesy of phasinphoto / FreeDigitalPhotos.net
About the Author: Sarah Brooks is a freelance writer living in Glendale, AZ. She writes on small businesses, health insurance and personal finance.