The Business Case for Offering Group Healthcare in America
The US Small Business Landscape
Under the Affordable Care Act, American businesses with fewer than 50 full-time equivalent (FTE) employees are not legally mandated to provide health insurance. However, over 60% of small business owners offer coverage because it is the most influential factor in recruiting skilled US workers and reducing costly turnover.
Substantial Tax Savings Under IRS Code
- 100% Tax-Deductible Business Expense: Employer contributions toward employee health insurance premiums are fully deductible on federal and state corporate income taxes.
- Section 125 Pre-Tax Payroll Deductions: Employee premium contributions are deducted before federal income tax, state tax, Medicare (1.45%), and Social Security (6.2%) taxes are calculated, saving both the worker and the business 7.65% in FICA payroll taxes.
- Small Business Health Care Tax Credit (IRC § 45R): Businesses with under 25 FTE employees earning under ~$56,000 average wages can receive up to a 50% federal tax credit on premium contributions.
Modern Group Plan Structures
Small employers can choose between traditional fully insured group plans, level-funded plans that refund unused claim reserves, or high-deductible health plans (HDHPs) paired with Health Savings Accounts (HSAs).
Custom Quotes for Your Business
Diverse Health Insurance shops rates across all major national group carriers (Aetna, Florida Blue, UnitedHealthcare, Cigna, Humana) to tailor benefits to your company’s balance sheet.
