Find out how small business health plans work in New York.
With one of the largest state economies in the nation, New York is home to many small and medium-sized businesses. According to a 2018 Empire State Development report, 98 percent of New York State businesses have fewer than 100 employees, making small employers a significant part of the state economy.
As a New York business owner, you may have questions about how small business health insurance works in your state. Continue reading to learn about New York health insurance group plans.
How to qualify for small business health insurance in New York
To be eligible for group plans in New York, you must meet the following requirements as a small business owner, as per New York’s Department of Financial Services:
- Your business must be located within New York State.
- Your business must have had between 1 and 50 full-time or full-time equivalent (FTE) employees over the past calendar year.
- At least 30 percent of your employees must earn $43,000 or less in annual wages. The wage level is adjusted every year to account for inflation.
- Your business must not have previously provided group health insurance coverage to your employees within the past 12 months.
If you are the owner of a sole proprietorship in New York, you should know that you usually would not qualify for small business health insurance unless you had eligible full-time or full-time equivalent employees. As a sole proprietor with no employees, you would instead qualify for individual health insurance in New York.
Your obligations as a small business after enrolling in a New York group plan
According to New York’s Department of Financial Services, in order to participate in HealthyNY, a small business must meet all of the following criteria:
- As the employer, you contribute at least 50 percent to paying for monthly employee premiums.
- 50 percent of your eligible employees participate in the group health insurance program. Employees who have health insurance through another source (including a spouse or government program) can count toward the 50 percent participation requirement.
- The plan is offered to all employees who work 20 or more hours per week and are paid $43,000 or less (adjusted annually).
- At least one employee who earns wages of $43,000 or less enrolls in the plan.
Once you offer group health insurance coverage and meet New York State requirements, your business may have access to significant tax advantages. For example, the monthly employee premiums that your business pays are usually 100 percent tax deductible. Offering small business health insurance can also mean reduced payroll taxes.
Qualifying for the small business health insurance tax credit in New York
As a New York small business owner, you may be eligible for a health tax credit to help you afford the cost of offering group health insurance to your employees. Typically, the requirements to qualify for a small business health insurance tax credit in New York are:
- Your business has 25 or less full-time or full-time equivalent employees.
- Your business pays an average annual salary or wage of less than $53,000 a year per worker (this amount is indexed annually for inflation).
- Your business contributes at least 50 percent toward paying for the cost of employee premiums (specifically, your employees’ lowest cost single tier coverage).
- Your business offers Small Business Health Options Program (SHOP) plan coverage to all full-time employees.
If your New York small business does qualify for the small business health insurance tax credit, then the maximum available federal reimbursement for your company is up to 50 percent of the premiums you pay for the medical, dental, and vision insurance of your employees. It is important for you to know that the tax credit is only available to your New York small business for a total of two consecutive years.
The small business health insurance tax credit is offered on a sliding scale, so the smaller your group, the more likely your New York business will benefit from the tax credit. For example, if your New York business has less than 10 full-time equivalent employees who are paid wages less than $25,000 annually, then your company may be eligible for the maximum tax credit amount.
How to find small business health insurance in New York
It’s fast, free, and easy to use eHealth to get affordable New York health insurance for your business. With eHealth’s online marketplace, you can compare plans from multiple insurance companies, find personalized quotes, and get unbiased support and advice from licensed health care agents. Visit eHealth today to learn more about New York small business health insurance plans that work for you and your company.
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. 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.