Q. I’m self-employed and am hiring employees. Under Obamacare, am I obligated to provide health insurance for them?
A. No, unless you’re hiring at least 50 full-time equivalent (FTE) employees. Businesses with fewer than 50 FTE employees (that’s 96 percent of businesses in the United States) have no obligation to provide health insurance to their employees.
You may find that the small business tax credit makes health insurance an affordable benefit you can offer your employees. If you have fewer than 25 employees and their average income is less than $50,000, there’s a tax credit for your business if you purchase a plan through the SHOP exchange and pay at least 50 percent of your employees’ premium.
But the Obamacare employer shared responsibility provision only applies to businesses with at least 50 full-time equivalent employees. They’re required to offer affordable health insurance, but the vast majority of these businesses that size were already offering coverage for their employees prior to the ACA.
Employers subject to the shared responsibility provision are subject to a penalty if they do not offer affordable coverage and at least one of their employees receives a subsidy to purchase individual health insurance in the exchange.