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Employer Health Insurance Requirements

Stay compliant by reimbursing for health insurance tax-free

Looking for employer health insurance requirements? Satisfy the employer mandate and ACA requirements for employers by reimbursing your employees for the health plan of their choice. 

  • Manage benefits for an hour or less per month
  • No more surprises, renewals, or participation rate concerns
  • A smart, hands-off alternative to group health insurance
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Am i required to offer my employees health insurance?

Take care of your team on your terms.

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No more one-size fits all plans! HRA plans can be customized and designed to achieve you or your clients’ goals. 

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Take Command will automatically generate the documents your employees need and can help them search for and enroll in a plan online.

No Contribution Limits

There are no annual contribution caps. This allows employers to define unrestricted benefit budgets.

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Want to dive into the details of reimbursing employees for health insurance?

Our HRA Guide will walk you through how HRAs work, HRA benefits, and HRA setup. 

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"Facing a 40% renewal, our broker introduced us to the idea. Take Command provides the tools there for everybody to enroll in very easy formats on the platform."

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"To attract and maintain talent, we needed benefits. Managing our ICHRA has been simple and hands-off. I spend two hours a month managing and administering it."

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Employer Health Insurance Requirements

Are you a business owner feeling confused about the employer health insurance requirements? You’re not alone! Employer health insurance requirements can vary depending on the state you live in and the size of your company. And the health insurance game can be very confusing and time-consuming. For example, some states require large employers to offer their employees health insurance. In other states, small businesses are required to offer health insurance to their full-time employees as well. There are also certain Affordable Care Act (ACA) requirements that many employers must adhere to when it comes to offering coverage or paying penalties. 

There are so many factors to consider, and it quickly becomes overwhelming for business owners trying to sort out employer health insurance requirements. For this reason, more and more businesses are opting for the Health Reimbursement Arrangement (HRA) model.

If you're confused about employer health insurance laws and what they mean for your business or its employees, read on!

Employer health insurance laws by state

Employer health insurance rules and regulations can vary by state. This is another reason why more businesses are opting for an HRA model. The rise of remote work has opened up the talent pool for companies no longer tied to a geographic region. But that makes the traditional group health insurance model difficult to manage. Enter HRAs, a flexible benefits option that gives employees the freedom to buy the insurance plan that works for them (wherever they live) and get reimbursed through the company HRA. 

If your business has employees in different states, their individual health insurance premiums might differ. And with your HRA, you can reimburse them for premiums and qualifying medical expenses (which will also vary by state) while remaining within the health insurance rules and regulations. 

The Federal health insurance regulations are pretty straightforward regarding the amount of money employers can contribute toward employee medical insurance. The IRS sets the guidelines for what you can and cannot do with your health care plan, so you'll want to make sure your business complies with these rules. 

Can an employer contribute different amounts toward employee medical insurance? It depends. If your company has a traditional health insurance plan, you can’t contribute different amounts towards employee medical insurance based on age or gender without being considered discriminatory against those groups. The only exception would be if other factors affect the cost of providing coverage, like having a high deductible or having certain pre-existing conditions (like diabetes) that cause more expensive treatments down the road. But if your company has an HRA, and has employees in different states with varying health insurance coverage, then your reimbursement may be different, and that is acceptable to the federal health rules and regulations.

Want more clarity about how to offer benefits? 


Will health insurance reimbursement help you save on benefits? 

In about half the country, individual insurance rates are cheaper than their group plan equivalents, meaning health benefits dollars will stretch further with ICHRA. Use our heat map to see if your location is prime for saving.

Affordable Care Act employer requirements

The ACA requires employers to offer their employees health insurance. There are different Affordable Care Act coverage requirements depending on whether you're a large business, small business, or self-employed.

Here's what you need to know about the Affordable Care Act coverage requirements and rules for offering health insurance to employees:

  • If your company has 50 or more full-time employees, ACA requirements for employers 2023 state that it must offer access to affordable coverage or face penalties.
  • For companies with fewer than 50 full-time workers, ACA requirements for small employers state that it must offer access to affordable coverage for employees who work 30 hours or more per week. 
  • All employers must provide documentation proving coverage eligibility for all full-time employees who request it within 90 days after being hired by submitting Form W-2 Wage and Tax Statement along with Form 1095-C Health Coverage Information Return form, which shows proof of eligibility during the open enrollment period each year.
  • There are several exemptions from this requirement, including employees who work less than the ACA eligibility requirements 30 hours per week or 130 hours per month. 
  • The ACA also exempts certain types of businesses and industries from the employer mandate, such as seasonal or temporary workers whose employment is expected to last fewer than 120 days within a 12-month period. NOTE: With an HRA, you can still offer health benefits to these types of workers. Here’s more about how that works. 

Under the Affordable Care Act, a large employer that does not provide health insurance will face penalties, so it’s more economical (and the right thing to do) to offer health benefits. 

The Affordable Care Act coverage requirements are some of employers' most frequently asked questions. It can be a lot to take on when you’re trying to navigate group health insurance. But you can get out of the health insurance game and still offer your employees great health benefits. With an HRA, you can reimburse employees for health insurance. They select and purchase their own plan, you reimburse premiums and qualified medical expenses. Check out our HRA guide to learn all about how it works. 

Get out of the insurance game and employer your employees with HRA benefits

ACA requirements for large employers

If you are an employer with 50 or more full-time employees, the ACA requires that you offer affordable health insurance to your employees. Under the Affordable Care Act, a large employer does not provide health insurance and owes a penalty under the employer shared responsibility provision of ACA. 

The ACA eligibility requirements for employers include:

  • Allowing dependent children up until age 26 to stay on their parent's plan.
  • Providing preventive care without any cost-sharing.
  • Eliminating annual limits on essential benefits such as hospitalization and prescription drugs.
  • Providing free preventive services, including screenings like mammograms and colonoscopies, every year without charging copays or coinsurance fees.

There are also reporting requirements under this provision which include providing statements showing how many full-time equivalents (FTEs) worked during each month along with total hours worked by part-time employees so they can calculate whether they meet these thresholds each year.



Ready to Get Started?

Begin designing your ICHRA plan today and be set up in minutes. You could start reimbursing your employees tax-free sooner than you think. 

Ready to get started?

Begin designing your HRA plan today and be set up in minutes. You could start reimbursing your employees tax-free sooner than you think.

Are employers required to provide health insurance to full-time employees?

  • The rules for offering health insurance to employees are complex. Business owners often wonder, how many employees do you have to have to offer insurance? And what are the rules for offering health insurance to employees? Here’s a quick breakdown. 
  • The ACA requires employers with 50 or more full-time equivalent employees to offer qualifying health insurance coverage to all full-time employees. This may include part-time workers who work an average of 30 hours per week over a month or two consecutive months. 
  • ACA requirements for employers with less than 50 employees state they don't have to offer coverage or pay a penalty for not offering coverage. However, these businesses may be eligible for the Small Business Health Options Program (SHOP). The SHOP offers small businesses an opportunity to purchase health plans for their employees through the state or federal marketplaces.
  • In addition, if you are self-employed and have no other employees besides yourself, you will also be required to provide qualifying health insurance coverage for yourself under the ACA if you meet the criteria above. Related: Can I use an HRA if I’m self-employed? 

When does an employer have to offer health insurance?

Employer health insurance requirements vary by state and can be complicated, so it's important to understand the laws in your area. If your company has 50 or more full-time employees, ACA requirements for employers 2023 state that it must offer access to affordable coverage or face penalties. For companies with fewer than 50 full-time workers, ACA requirements for small employers state that it must offer access to affordable coverage for employees who work 30 hours or more per week. 

As you can determine from reading the above sections, group health insurance is difficult to navigate and leave many employees unhappy with the benefits offered. An alternative to traditional group plans, HRAs put the power in the employees' hands, shifting the risk from the employer and offering more personalization and choice for workers. They are also an effective recruitment and retention strategy.

Rather than asking how many employees do you have to have to offer insurance and wondering about the rules or offering health insurance to employees, opt for a more modern plan for the modern workforce with an HRA. 

Are small businesses required to provide health insurance?

Are you required to provide small business health insurance to employees? It depends.

Under the Employer Mandate, the Affordable Care Act requires that all employers with more than 50 employees offer affordable health insurance. How many employees do you have to have to offer insurance?

To determine if the rule applies to you, you first have to figure out how many full-time equivalents (FTE) employees you have on your team. Use the formula below to calculate your FTE number. 

(Total hours worked by part-time employees each week / 30) + # of full-time employees = Your FTE number).

Do small businesses have to provide benefits? If you have 49 FTE, you technically aren't required to offer insurance. But there are many reasons you should consider offering health insurance, like keeping your employees healthy and boosting recruitment and employee retention. 

Take Command can help with business health insurance!

Our HRA experts are ready to talk to you about any specific questions about your business and how HRAs can help you. Check out these helpful resources and read all about HRAs on our blog.

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