Should You Offer Employees Health Care Benefits?
Health care benefits are optional for most employers, but of critical importance to most employees. Employers should be aware of the pros and cons of offering health benefits to their employees. Benefits are a critical piece of an employee compensation package, and health care benefits are the crown jewel. Health care benefits, along with time-off benefits, are the most popular of benefits to employees. Every employer must at least consider whether to offer these types of benefits and in some cases employers must offer health care in order to remain competitive with other businesses for the most talented employees. Another reason why many employers choose to offer health care benefits is so that they themselves can take advantage of less expensive health insurance than they could get on their own as well as tax breaks for the contributions made by the business. Unless you are an employer in Hawaii or Massachusetts, you are not required by law to offer your employees health insurance benefits. Hawaii is the first state to require employers to provide health insurance to employees. The law, the Prepaid Health Care Act, was passed in 1974 and requires employers to provide health insurance to all full-time employees, either through an indemnity plan or an HMO. As of October 1, 2007, Massachusetts employers with more than ten employees are required to offer pre-tax health plans to employees. The enactment of the Patient Protection and Affordable Care Act and related legislation in 2010 will require employers with more than 50 employees to offer health coverage or be subject to assessment of a tax penalty. This mandate is in effect beginning in 2014. Conversely, beginning in 2010, small businesses with no more than 25 employees are eligible for a tax credit for purchasing health insurance for their employees. If you do make the decision to offer health insurance benefits, be aware that you call into play a whole...
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