Have 50 to 99 Uninsured Employees? Better Read This

uninsured employees

Small businesses with 50 to 99 full time employees must offer affordable health insurance to employees and their dependents by January 1, 2016.

Small businesses also need to file new IRS tax forms on the same January 1 date. Those that don’t have the staff, know-how, or time to do the work may seek to outsource it at a cost likely ranging from hundreds to thousands of dollars. The tax forms pose an additional burden on companies, even if they outsource the work.

A Big Nightmare

David Lewis, president of Norwalk, Connecticut-based Operations Inc., a human resources provider, told the AP of the new insurance and tax filing burdens, “It’s probably going to be a big nightmare for a lot of businesses.”

His company will see an increase in business of around 20 percent associated with small businesses seeking to comply, he noted.

Small businesses not currently offering insurance must sign up for policies that meet the law’s standards for minimum coverage. The enrollment period for buying insurance began Nov. 1.

Finding the right policy can take time and require a company to go through a steep learning curve.

Newark, New Jersey-based marketing consultancy Consultants 2 Go, which has nearly 100 employees, hired a human resources executive to research the different available plans. “We needed someone to spend 24 hours a day reading through all this stuff,” co-owner Sandi Webster says. “We have to make sense out of this.”

Even companies that have offered insurance may be surprised to find that their current offering may not meet the law’s new requirements. In fact, some industry pundits have noted that for some small businesses, paying the $2,000-per-employee penalty for not  offering insurance may be more cost-effective than meeting the legal requirements.

The associated tax forms need to detail the cost of the company’s insurance and include the names and social security numbers of employees and their dependents, as well as how long they’d previously been covered. Many small businesses must compile this information from more than one source, including payroll companies, health brokers and insurers. They must then calculate whether their coverage was affordable, according to the health care law. Small businesses that make a mathematical error in their calculations can face IRS penalties.

And if small business owners need to seek information from their employees about their family members, this may cause friction.

While there’s always the option of hiring a payroll company to compile the forms, small businesses may still need to coordinate between the payroll company and the health broker or insurer.

HealthCare.gov Photo via Shutterstock


Ed Lieber Ed Lieber is a staff writer for Small Business Trends. He is a journalist and marketing copywriter with 20 years of experience writing, editing and managing for print and digital vehicles.

6 Reactions
  1. I’m still not a fan of forcing businesses to insure employees. If companies want to offer it as part of the compensation in order to attract/retain employees, that’s great. If your employer doesn’t offer insurance you should go take care of that yourself.

  2. While I also don’t like the idea of forcing employers to do this, I think that it is somewhat a must. I guess it has something to do with me being a pro-employee even if I have my own business. I just believe that people work better when they feel more secure.

  3. This is yet another burden on the backs of small businesses. I do believe in providing for our employees but the cost of insurance rises every years.

  4. I agree that businesses should participate in providing healthcare coverage to employees. The question is what should the framework look like – government mandated coverage that has resulted in previously insured Americans losing their healthcare coverage, and costs to rise dramatically – or a free-market solution that encourages competition and provides insureds the ability to participate in managing their healthcare costs, and provides freedom of choice rather than a shrinking population of medical professionals from which to choose from.

    Which option do you prefer?

  5. I think the real issue hear is not should we provide healthcare but why does the cost keep rising ????

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