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Provide health and insurance coverage to employees in the US

A group health plan is a valuable employee welfare benefit plan created and managed by an employer or an employee organization (such as a union), or both, to directly provide medical care to participants or their dependents, either through insurance, reimbursement, or other means.

For both U.S. and international businesses, it is essential to offer health insurance to employees located in different states to retain top talent. However, managing benefits on a nationwide scale and complying with state-specific labor laws can be time-consuming and challenging. The good news is that you don't have to handle it alone.

Take a look at our comprehensive guide to learn how you can effectively administer cost-effective and competitive healthcare benefits to your distributed workforce across the United States.

Content of this blog

Key takeaways
  • Starting January 1, 2019, health insurance coverage is no longer mandatory at the federal level.
  • Some states still require that you have health insurance coverage to avoid a tax penalty.
  • An employer with 50 or more full-time employees must offer minimum essential coverage.


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Is health insurance mandatory in the USA?

Starting from January 1, 2019, health insurance is no longer compulsory at the federal level in the United States. The individual mandate, which was previously a part of the Affordable Care Act (ACA), was eliminated in 2017.

Nevertheless, it's important to note that certain states still have an individual mandate in place. These states require their residents to maintain health insurance coverage to avoid facing a tax penalty. The states that currently have this requirement include:

- California

- Connecticut

- District of Columbia

- Hawaii

- Illinois

- Maine

- Massachusetts

- Maryland

- New Jersey

- New York

- Oregon

- Rhode Island

- Vermont

Employer Requirements for Providing Coverage

There is no federal law that mandates employers to provide their employees with health insurance. However, if an employer has 50 or more full-time employees (or the equivalent of part-time employees), they must offer "minimum essential coverage" or face penalties. Some states, such as California, Massachusetts, and New Jersey, have mandates that require their residents to have health insurance. If you reside in one of these states, this may influence your decision, even if you have fewer than 50 employees.

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Challenges for U.S. companies

Here are some of the challenges that companies in the United States face when providing health insurance to employees located in different states:

  • Research - You desire to provide your workforce with the flexibility to work from any location or relocate as necessary, but you may be uncertain about how to guarantee their medical coverage in different states.
  • Affordability - You may be interested in hiring talent across the U.S., but providing multiple medical plans for different states can be costly.
  • Availability - If you are considering hiring only one employee or part-time employees in a different state, you may be unsure about how to effectively provide them with suitable medical insurance options.
  • Administration - Navigating the HR complexities of managing a remote team across the country while offering comprehensive benefits can be a daunting task.


Challenges for international companies

Here are some of the challenges that international companies face when administering health insurance for employees in different states:

  • Compliance - Your remote employee is moving to the U.S. To retain this employee, you must compliantly relocate them while providing them with the same medical coverage they currently have.
  • Attraction - You may be interested in hiring a highly qualified candidate in the U.S. and are seeking a competitive edge, such as a comprehensive and distinct employee benefits package, to attract them to join your company.
  • Competition - You are looking to establish a strong market presence in the U.S. and want to position your medical benefits as a compelling differentiator compared to other leading companies in your industry.


Learn about the 1095-C form for health insurance

Employers should know about Form 1095-C for health insurance reporting. Form 1095-C, titled Employer-Provided Health Insurance Offer and Coverage, is a statement of health coverage offered to eligible employees.

Who has to file Form 1095-C?

Under the health care law, employers are required to offer health insurance to their workers if they meet the criteria of being an "applicable large employer" (ALE). An ALE is defined as a company or organization with at least 50 full-time workers or full-time equivalents. According to the law, a full-time worker is an individual who works a minimum of 30 hours per week.

A full-time equivalent, meanwhile, is two or more part-time employees whose hours add up to a full-time load. Two workers who each put in 15 hours a week, for example, would make up one full-time equivalent (15 x 2 = 30 = 1 FTE). Only ALEs are required to file Form 1095-C.

What's the difference between a 1095-C and 1095-B?

Form 1095-C explains the coverage options that were offered to an employee. On the other hand, the 1095-B form provides details about the employee's actual insurance coverage, including the names of the family members who were covered. This form is issued by the insurance provider instead of the employer. However, some companies are "self-insured," which means they bear the cost of their employees' medical bills instead of paying premiums to an insurance company.

  • In the case of self-insured employers, the employer is also the insurance provider, so it will also send out 1095-B forms.
  • Employers in this situation can send the “B” and “C” forms on a single combined form.


Affordable Strategies to Provide Health Coverage to Employees

Companies can compare insurance plans and prices from different providers to find the best option for employees. Factors to consider include coverage, premiums, and benefits.

  1. Companies can provide international insurance coverage to employees for medical expenses abroad, which frequent travelers or those with families overseas.
  2. Employers can provide their staff with flexible benefits, such as health savings accounts (HSAs) and flexible spending accounts (FSAs), which enable them to pay for their medical expenses using pre-taxed funds.
  3. Companies can group their employees to get better prices on insurance plans. This is because insurance companies offer discounts to large groups.
  4. For repatriated employees, the costs can be significant, especially if they need to be quickly transferred to their home country for medical treatment. Businesses should take these costs into account when planning their insurance coverage.

Companies need to follow the laws of the state in which they operate when providing health insurance to their employees.


Why companies choose H&CO as their Staffing Services provider

At H&CO Staffing, we possess an extensive knowledge of the latest hiring trends and technologies with an extensive network of highly qualified candidates. This enables us to assist businesses in swiftly and effectively identifying the perfect talent to meet their specific requirements, all while ensuring they employ the most efficient hiring strategies available.

For more than 25 years, we have specialized in connecting top accounting and finance talent with organizations where they will have a significant impact. Request a consultation with one of our experts!

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