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NY State of Health's Small Business    Marketplace

Small businesses with under 50 full time employees do not have to offer their employees health insurance, however if they do they might be eligible for a tax credit.

Smaller Businesses: 50 or Fewer Employees

No employer mandate - Small businesses with fewer than 50 employees do not have to offer their workers health insurance.

Although small businesses will not pay penalty if they do not offer coverage, your employees are still required to have insurance as of 2014.

Buying insurance - NY State of Health’s Small Business Marketplace provides small businesses with a way to buy insurance. Group plans can be purchased at anytime of the year in the Small Business Marketplace. To learn more about the Small Business Marketplace, click here.

Small businesses can also buy insurance outside of the Marketplace. However, the small business health care tax credit is only available through the Small Business Marketplace. You can also offer your employees a choice of plans in NY State of Health. To learn about buying insurance outside of the Marketplace, click here.

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Why offer health insurance

There are many reasons you may want to provide health insurance to your employees, even if you are not required to do so.
  • Tax benefits for you:
    • All businesses can claim a deduction from their income taxes for the cost of health insurance.
  • Some small businesses that offer health insurance can claim a health care tax credit that can be as high as 50% of their health insurance costs, depending on the type of business (profit or non-profit), number of employees (under 25), their salaries (average salary of less than $50,000), and the amount you pay (at least 50% of premiums).
  • For small businesses that are non-profit, the health care tax credit is refundable.
  • Learn more about the tax credit here.
  • Tax benefits for your workers:
    • Businesses that offer health benefits can provide employees with tax savings by letting them pay their share of the cost of coverage with pre-tax salary reductions (Internal Revenue Code Section 125 Premium Only Cafeteria Plans).
    • The amount you contribute towards the cost of health insurance coverage for your workers is excluded from the employee’s gross income, which also results in additional employee tax savings.
  • Workforce and Operational Benefits
    • Businesses that provide employees with health insurance coverage may be more competitive by helping them:
  • attract and retain better workers
  • maintain the health of their workers
  • reduce hiring and training costs

As of 2014, individuals will have to get coverage or pay a penalty. Offering your workers coverage is a way to help them get the coverage they need and are required to have under the federal health care law.


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