Do Michigan Employers Have to Offer Group Health Insurance?
Published on December 18, 2018
Updated August 6, 2019
Do Michigan employers have to offer group health insurance?
If you have a small business, or work for a small business, you might be wondering, “Is group health insurance required in Michigan?” Of course, most employees are likely hoping that health insurance is a benefit included with their employment, and most employers are probably worrying about whether or not they should (or even can) offer it.
According to Business and Legal Resources (BLR), there is no state law requiring small business employers to offer group health insurance, but most employers do offer this benefit to their valuable small business employees. eHealth also found this to be true in a study on small business health insurance trends in 2018. If you’re a Michigan employer with 50 or more employees though, you’re required by federal law to offer group health insurance. Keep reading to learn more about Michigan group health insurance requirements that might apply to your small business.
Federal laws on group health insurance in Michigan
Although laws vary from state to state, there are federal laws in place that might require small business owners to offer health insurance.
- Employer mandate for large employers. Obamacare’s mandate for “large employers” (businesses that employ 50 or more “full-time equivalent employees”) is still relevant despite other changes to Obamacare. This mandate requires “large employers” to provide full-time employees with health insurance that meets minimum essential requirements. Usually large employers who offer health insurance must also pay 50 percent or more of their employees’ health insurance premiums. This percentage can vary from state to state.
- Requirements for small businesses. Small businesses with less than 50 full-time employees are not required to offer health insurance to their employees, but they still have the option to do so. If you offer small business health insurance, it must be offered to all full-time and full-time equivalent employees. In order to qualify for group health insurance, you must have at least one employee besides yourself or a spouse, and you must be a legitimate business.
Small employers and the health care tax credit in Michigan
If you’re a small business owner offering group health insurance in Michigan, you have the opportunity to qualify for the health care tax credit. If you choose to offer group health insurance despite not being legally required to, then you’re in the running for this tax break. This credit can be up to 50 percent of what you’ve paid for your employees’ premiums. In order to benefit from this tax credit, you must:
- have no more than 25 full-time equivalent employees
- pay your employees an annual wage of no more than $52,000
- pay 50 percent or more of your employees’ premiums
- purchase your group health insurance plan through a Small Business Health Options Program (SHOP), which can be done on a federal or state exchange, and also through eHealth
Small business owners in Michigan can qualify for this tax credit for up to two consecutive years. Keep in mind, if you don’t qualify for this tax credit, there are plenty of affordable off-exchange group health insurance plans on eHealth that you can see free quotes for, talk with licensed agents about, and apply for in just minutes. Watch this video to see how simple it is for Michigan small business employers to offer group health insurance:
Should Michigan employers offer group health insurance?
Now that you know the specifics about whether you have to offer group health insurance or not, it’s important to look why you should offer group health insurance. Some of the reasons other small business employers give for offering health insurance include:
- retaining the best workers
- offering group health coverage as a business strategy
- a sense of responsibility towards employees
So while you might not be required to offer group health insurance as a Michigan employer, you have plenty of reasons to do it anyways. Make sure to visit eHealth’s website to check out our resources, tools, and free quotes.
Group and employee definitions vary by insurance company and state, so be sure to check with a licensed insurance agent to find out the details for your specific situation.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.