Should I Offer Health Insurance With Ten or Less Employees?
Hello, I am just getting a small company together to open in a few months. I and one other employee will be working it. They will need health care etc.
I will and am struggling to get it going so how much will this cost me?
I’m very scared and worried. I’ll pay so much not make a profit at all.
If you are a small business with ten or less employees you can either not offer health coverage, or get tax credits for up to 50% of employee premium costs.
The requirement for businesses to offer coverage only applies to employers with 50 or more full-time equivalent employees. Businesses with less than 25 full-time equivalent employees can get tax credits for insuring their workers. Businesses with ten or less qualify for the maximum credit of up to 50% of the total employee premium (not the employer's premium). Businesses who want the credit should use ObamaCare's SHOP to obtain employee health insurance.
If you are projecting not to make a profit (or not to make much of one) it doesn't make sense to offer coverage. The main reason to offer coverage (aside from being a good person and regulations) is tax breaks. If you feel you do want to offer coverage take advantage of all the tax benefits and keep in mind tax breaks primarily help if you make enough to pay taxes.
With a two person company like this we suggest you guys both use the Marketplace or Medicaid. Employees will most likely get a better deal getting health insurance on the health insurance marketplace with tax credits (or through Medicaid depending upon the state and wage) as will you.
One last tip, don't forget to write off your health insurance costs as a small business owner and don't forget the other costs associated with running a business and paying employees like payroll taxes. Often when getting started an entrepreneur will benefit from being self employed and working with other people as contractors, of course it all depends on what type of businesses you are starting.