QUESTION

I have 47 employees and I’m trying to decide if I should hire more. What are the implications if I have more than 50 employees?

Coverage for small employers | Small Employer Coverage |
ANSWER

Most states define a "small employer" as an entity with one to 50 full-time or full-time equivalent workers. However, a few states define small employer as having up to 100 employees. Check with your state Department of Insurance to see if your state is one of these.

In most states, if you have more than 50 employees at the time of your contract renewal, you will be considered a large employer. The Affordable Care Act applies “shared responsibility” requirements to employers with more than 50 full-time or full-time equivalent employees. While it does not directly require such employers to offer health insurance, it imposes financial penalties if their employees qualify for premium tax credits for individual coverage, either because the employer does not offer coverage or offers coverage that is deemed unaffordable or to not provide minimum value.

Currently, in most states, groups with more than 50 employees are subject to different rules than groups with 50 or fewer employees. For example, insurers offering coverage to large groups do not need to provide the essential health benefits package, while they are required to offer such coverage to small groups. (45 C.F.R. §147.150). They also cannot charge a small employer higher premiums based on employees’ health status, while they can do so for groups with more than 50 employees. (45 C.F.R. § 147.102)

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