Group Plans for Employers

An employer-provided health insurance plan can be an affordable solution to meeting the insurance needs of the owners of a business and their employees.  In addition, the employer can benefit from tax deductions and improve employee retention.   

As a general rule, 100% of the expenses incurred by an employer are tax-deductible as ordinary business expenses.  The employees may also benefit if the cost of the premium is deducted from their paycheck before state and federal taxes are deducted.  

The Affordable Care Act (ACA) employer mandate generally applies to businesses with 50 or more full-time employees, and penalties may apply if health insurance is not offered to employees.  

With a group health plan, the costs are typically shared between the employer and the employee.  Some employers choose to pay the full amount of the premium, while others pay a portion and require the employee to pay the difference.  

The premium price will be based primarily on the general information of the group, such as age and gender.  Unlike individual health insurance that must be purchased during enrollment periods throughout the year, group health insurance can be purchased at any time. 

With the passage of the Affordable Care Act, tax credits may be available to small businesses if they meet certain criteria when offering coverage to their employees.