While you are not required to offer health insurance to all your employees and their dependents, it’s highly recommended you do so. Offering a comprehensive benefits package goes far to keep your employees healthy and happy, while providing you with tax advantages.
Groups with fewer than 50 full-time employees are exempt from the ACA employer mandate. This mandate requires groups of 50 or more full-time employees to offer health insurance to all full-time employees. Because smaller groups are exempt, they do not have to provide this level of benefits.
If you have budget constraints, you may be able to limit coverage to certain categories of employees. One common approach, for example, is to offer coverage only to full-time employees. (According to healthcare.gov, a full-time employee works at least 30 hours per week, 120 days per year.)
It’s important to note that employees cannot be denied coverage for a pre-existing condition. The Affordable Care Act (ACA) protects employees from being excluded from health insurance benefits regardless of medical condition.
Am I obligated to offer health insurance to dependents?
You are not obligated to offer health insurance to dependents of eligible employees.You may choose to provide employee-only coverage, or extend coverage to spouses and children. If dependents are covered, the ACA requires group insurance plans to extend coverage to dependents through age 26.
What are the laws regarding benefit eligibility?
If you decide to offer varying levels of benefits to different categories of employees, it’s important to follow legal requirements, or rules established by the IRS for employee classes. The distinctions you make between classes or categories of employees must be based solely on the employee’s status within the company. For example, you could offer different levels of coverage to employees based on:
- Full- or part-time status
- Where the employee works (in-state vs. out-of-state)
- Whether an employee is salaried or hourly
- Job titles or seniority
In addition, employees in each category must be treated equally. That means that within each category you’ve created, employees must receive the same level of benefits.
For example, Blue Cross and Blue Shield of Kansas offers small groups a “management only” plan for their businesses. In this case, coverage isn’t offered to all full-time employees, but only to employees who are considered “management.”
When considering varying levels of benefits, it’s important to make sure the various class distinctions aren’t discriminatory. Generally speaking, discriminatory practices would include any individual characteristics protected by federal law, including:
- Race
- Color
- National origin
- Sex (including pregnancy, childbirth, and related medical conditions)
- Religion
- Disability
- Genetic information
- Citizenship status
- Age
Some states have enacted laws that go further. In any case, it’s important to consult with an attorney to ensure you meet these legal requirements.
Let us help.
Browse your small group options and get a free, quick quote today with Blue Cross and Blue Shield of Kansas. Our Small Group Account specialists can help you find the best options for your business. You can also call us at 866-584-0171, Monday through Friday, 8 a.m. to 4:30 p.m., or email your questions to smallgroup.sales@bcbsks.com