Does My Small Business Have to Provide Health Insurance?

person sitting on question mark

As a small business owner, you may be asking “starting in 2014, do I have to provide health insurance to employees?” No business has to offer health insurance. However, the Affordable Care Act includes a mandate for certain large employers to either offer qualified and affordable health benefits, or pay a tax penalty. This is commonly referred to as the employer mandate, “play or pay” requirement, or employer shared responsibility.

It is important for your business to understand whether you are defined as an applicable large employer (ALE) by the IRS, as the mandate and employer tax penalties only apply to your business if you are an applicable large employer. ALEs are those that employed, on average, at least 50 full-time employees (including full-time equivalents) during the prior calendar year. Full-time employees are those who had, on average, 30 hours of service per week (or 130 hours in a calendar month).

How to determine if your organization is an ALE?

This Large Employer Calculator is designed to help you determine if your organization is considered an ALE in regards to the employer shared responsibility penalties mandated by the Affordable Care Act (ACA).