How many employees does a company have to have to offer health insurance in California?

If you have any involvement in the employee benefits program at your California company, you may be aware of regulations regarding full-time and part-time employees andhealth care benefits. Depending on the status of the company and its part-time employees, these changes may be significant. Do part-time employees get benefits? What is considered a part-time employee, and what strategies may best benefit companies impacted by the changes? Here are some frequently asked questions and answers about how California part-time employees get benefits.

What is Considered Part Time In California?

At its most simple, a part-time employee is defined as someone who works less than 30 hours per week. When it comes to regulations, however, few things ever seem to occur at their simplest. There may be lower-end minimums for part-time workers, like 15 hours weekly. Generally speaking, small group insurance carriers only consider those working 20 hours or more per week. Below that, employees may be considered below the threshold to be considered for benefits.

How far back do they look when calculating part-time hours? While individual carriers may have their own guidelines, frequently it is one-half of the previous quarter's hours for part-timers. It is also important to note that part-time workers are W2 employees and not contract workers or 1099 workers. Contract workers are not counted as full or part-time employees. Some employers may attempt to take advantage of this by referring to some employees as contract workers. This can lead to significant issues for employers who misclassify workers.

Regulations Affecting California Health Care Benefits

The first part of the regulations requires Californians to obtain health care coverage at minimum standards. Coverage must be secured for individuals, spouses and partners, and children residing in California. Those not complying could face additional state taxes. Additional subsidies are available to help cover the cost of health care when purchased from CoveredCA.com.

Regulations also mandate that employers with 50 or more employees working full-time (30 or more hours weekly) are required to provide at least minimal levels of healthcare insurance. Employers with 50 or more employees are referred to as "Applicable Large Employers", ALE.

Employers with fewer than 50 full-time employees are not required to provide healthcare coverage. While small employers with 50 or fewer employees are not required to offer coverage, if they decide to offer it, coverage must meet ACA minimum standards.

For companies who may see this 50 employee mark as being avoidable by simply converting more full-time employees to part-time employees, there is the issue of equivalents. Now, hours worked by part-time employees have to be counted as a portion of a full-time employee. For example, all part-time hours are added up and divided by 120 to determine the number of “equivalent” full-time employees. These are added to the number of full-time employees already on staff. This is designed so employers will not just slash full-time staff to avoid health care benefits compliance. It is important to note that employees in each classification, full or part-time, be treated equally when benefits are offered.

Do Part-Time Employees Get Benefits In California?

Even if an employer offers health care benefits to full-time employees, it does not have to offer health care benefits to part-time employees. If benefits are offered to part-time employees, then all employees who are part-time need to have access to the same benefits.

All this being said, there are plenty of reasons an employer may wish to offer health care benefits to full-time and even part-time employees.

Health Insurance for Part Time Employees in California Strategy

Employers of all sizes are discovering that offering health care benefits can pay dividends whether they are required to or not.

There are Tax Benefits for Employers

Employer contributions to a health care benefits package are tax deductible. This can reduce taxes for employers offering benefits, helping to offset costs.

Improved Retention. Health care benefits encourage employees to stay with an employer and make it a bit more challenging to change employers. When companies offer health care benefits, it places more weight on their side of the scale.

Recruiting Tool.A company that offers health care benefits has an advantage when recruiting new employees. This is particularly true if their current employer doesn't offer such benefits.

Improved Health and Attitudes. Helping employees maintain their health can improve attitudes, overall health, and even productivity.

A Sense of Community and Belonging.For many employees, especially Millennials and younger, they seek more than a paycheck from their jobs. They want to be a part of something bigger, and working for a caring, responsible employer is critical. Offering group health benefits can help to fill that need.

It May Be Easier Than You Think

Offering a health care benefits program at your company may be easier and more affordable than you believe. Rather than attempting to manipulate employee full-time and part-time rosters to avoid offering it, many companies are finding it easier to embrace providing health care for employees.

This is particularly true when you have the assistance of an employee benefits specialist like AEIS. We are a California-based company with experience in helping small and mid-sized companies not only get into and stay within government mandates, but also help them maximize their ROI.

Getting the maximum value from your company's health care and employee benefits programs does not always have to just be about compliance or even about spending as little as possible. Your benefits program should always add value. At AEIS, we can help you with this.

While compliance issues are critical in managing your health care and employee benefits programs, there is more at stake; you need to make your company as attractive as possible so that you can recruit and retain talented workers. Now may be just the perfect time to do just that.

The ever changing health care laws can be hard to keep up with. Don't wait to discuss your company, your options, and how health care benefits can help take your company to the next level, contact AEIS today. AtAEIS, insurance is just the beginning. While health care insurance can be complex, we make it simple for you. If you have questions about your status under the recent changes in the California health care laws, we encourage you to contact us.

Disclaimer: Any information related to compliance, laws and regulations, or other subject matters in this blog is intended to be informational and does not constitute legal advice regarding any specific situation. The content of this blog is based on the most up-to-date information that was available on the date it was published and could be subject to change. Should you require further assistance or legal advice, please consult a licensed attorney.

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