Every business owner has asked this question at some point: “Do I have to offer health insurance to my employees?” My question is: “Why wouldn’t you?”
Tonight an interesting topic came up over dinner. Should an employer offer health insurance to their full-time employees. The first thing that has to be answered is whether an employer is required to offer health insurance under the new Affordable Care Act.
The Affordable Care Act (ACA) does not require employers to provide health insurance for their employees. The Employer Responsibility provision of the ACA only applies businesses with more than 50 full-time employees. To learn more read the Employer Bulletin on Automatic Enrollment, Employer Responsibility, and Waiting Periods.
In other words, a company with less than 50 full-time workers is not required to offer healthcare benefits to their employees. You could just leave it there and feel just fine about going into your office tomorrow to tell all your 49 employees that if they want benefits, they should go to a larger company. Let’s take a moment to think about that though…
While I understand the necessity of making healthcare benefits a non-requirement for small companies, I don’t think this is a blueprint for a successful business. While my company is very small and many small companies cannot afford to offer their employees health benefits (it’s not cheap), I don’t feel that it’s an option to leave my employees pulling their loose change from the seat cracks to pay for their own health insurance. Even if it isn’t the best insurance in the world, I can do something more than nothing!!!
Why do I feel this way? If I do my job right and hire the best, those employees will bring in new business, form relationships with my clients and grow my company far beyond what I can do on my own. Given that said employees are such an integral part of my company, why would I risk losing them to a company that does offer benefits? Why would I do something that could hinder the progress, productivity and financial growth of my company?
Employees who don’t have adequate healthcare are more likely to get sick and make mistakes. When an employee gets sick, they take time off. When [insert your star employee's name] is out, either his/her job function is shut down while they are out or everyone else has to do their job to pick up the slack. In the end, you lose your star employee, make your other employees stressed (not to mention, answering craigslist help wanted ads — on the clock), productivity is stifled and it all trickles right on down to the client who is no longer happy either. Sounds like a recipe for disaster to me.
My thought is this: If you can afford the employees, you can afford to take care of them.
Even starting out with my 4 person team back in 2007, I offered healthcare benefits AND an abnormally awesome PTO package. I wasn’t required by any laws to do this, and admittedly the healthcare was not the best, but I did it. I wanted to do the right thing.
Even If it means not hiring another employee and taking on a little more responsibility now so you can provide healthcare for your small team, then do it! You may end up with a team so enthusiastic about their job, you find you didn’t need that extra employee after all!
So, while the question may exist: “Do I have to offer health insurance to my employees?” The answer needs to be much broader than how much cash you have in your business savings today! You have to look at the bigger picture and you have to decide whether you want to be a mediocre employer with a good company or a great employer with an exceptional company.