If you hire part-time workers, do you have to offer them health insurance as an employer? What does the law require? What are the consequences for not offering coverage? It’s tough to keep up with the complex changes in health care laws. But here are a few basics that can help you answer the question “are part-time employees eligible for health insurance?”
Part Time Doesn’t Mean Less Than 40 Hours a Week
The Affordable Care Act requires that private sector employers with more than fifty Full-Time Equivalent (FTE) employees must offer health insurance to those workers or pay a tax penalty. They must offer this coverage to workers who put in at least thirty hours a week on the clock. It’s not just those who work forty or more hours. Part-time workers who work less than 30 hours/week are not included. So, there is no tax penalty at this time for excluding them from a workplace health benefits plan. That said, there are still steps an employer can take to attract and retain good quality part-time talent by making it easier to get health coverage.
What Can Employers Do Instead?
Even part-time workers must maintain health coverage or face their own individual tax penalty unless they qualify for an exemption. The health insurance marketplace is notoriously difficult for the average person to navigate. Many families simply give up and go without coverage. Or, they end up with a plan that doesn’t fit their needs because they simply can’t figure out how to make an informed decision.
Fortunately, independent insurance brokers are available across most of the United States. They are happy to provide free group educational meetings and one-on-one consultations with a company’s employees. This service is often available even if the company is not providing a group health insurance plan or excludes part-time workers from the plan. Such brokers can help workers understand their options. Plus they help them choose an appropriate plan and figure out if they qualify for subsidies or state-funded care (as many part-time, low-income workers do).
Hosting this type of learning session and connecting part-time workers with valuable resources is a low cost or no cost way for employers to help part-time employees gain coverage. The brokers make their commissions from signing up families and individuals for health insurance plans. Experienced brokers or consultants may also be able to review a company health plan. They can offer lower-cost options for group coverage for some or all employees.
Are You Doing Part Timers a Favor by Making Them Eligible for a Group Plan?
Of course, any employer is free to offer health insurance to part-time employees, regardless of how few hours they work. But it might surprise you to know that this could potentially do more harm than good. Part-time employees who are offered health coverage by an employer but who would prefer to buy a plan through the Marketplace may be disqualified from receiving tax credits or other savings. It depends on their income level and various factors associated with the affordability and standards of your group plan. It’s best to speak with an expert on the subject before making a change that could have unforeseen consequences!