Are Part-Time Employees Eligible for Health Insurance?

Do you know that about 49% of Americans receive employer-sponsored health insurance?

Whether a small business or a large business, businesses rely on different types of employees to get work done. Companies can hire full-time employees, independent contractors, or part-time employees for the job, and they are required to provide them with some additional benefits. one of them, and very important, is health insurance. It is a fact that full-time employees are subject to this benefit, but the question arises whether part-time employees are eligible for the same. the simple answer to this question is yes, they are.

Reading: How many hours do you have to work to qualify for health insurance

However, this topic can be a bit tricky at times and a deeper understanding of the topic may be required to fully understand what is and is not available to part-time employees. Some laws require that part-time employees be offered certain benefits. this may include paid sick leave or health insurance or short-term disability insurance. it is essential to consult the laws of each state so that employers are sure of what they need to offer part-time employees in this regard.

table of contents

• who is a part-time employee?
• difference between part-time and full-time employment
• health insurance for part-time employees
• rules for health insurance for part-time employees
• 1. rules set by the affordable care act (aca) for part-time employees
• 2. rules set by insurance companies
• pros and cons of providing health insurance to part-time employees
• conclusion
• key points

who is a part-time employee?

If you’re wondering whether or not you can be considered a part-time employee, you can determine that by comparing the number of hours you work. Part-time employees work fewer hours compared to full-time employees, and according to the US Bureau of Labor Statistics, part-time employees work between one and 34 hours per week. the exact number of hours employees work may vary depending on the business field in which they are employed.

difference between part-time and full-time employment

See also: Dos and Dont’s following an Accident

The main difference between full-time and part-time employees is the number of hours they work each week. Aside from the time they spend on their jobs, the Fair Labor Standards Act does not mention any other difference between full-time employees and part-time employees. the definition of other criteria in relation to part-time employment is left to the employers. however, employers must understand and define the other criteria based on other laws that may define what part-time employment entails.

health insurance for part-time employees

Part-time employees’ eligibility for health insurance depends on how part-time work is defined in individual state law or federal law and many other factors. Under the Affordable Care Act (ACA), employers must offer health insurance benefits to employees who work at least 30 hours per week or 130 hours per month. Failure to do so may result in the employer being penalized. Health insurance also depends on the insurance companies. Some companies also offer health insurance for employees who work around 20 hours a week.

rules for health insurance for part-time employees

offering health insurance to part-time employees also means that the employer will have to follow some rules to comply with the regulations set by the government. The rules, in this case, are set by both the insurance company you choose and the Affordable Care Act (ACA).

1. rules set by the affordable care act (aca) for part-time employees

Under the Affordable Care Act (ACA), employers are required to offer health insurance to their employees if they have at least 50 full-time equivalent (FTE) employees working for them. According to this law, full-time work is defined as anyone who works more than 30 hours per week. In addition, an employer that chooses to offer health insurance benefits to part-time employees must also comply with the following terms.

• Health insurance benefits must be offered to all employees who work the same number of hours and perform the same type of function. employers cannot pick and choose to offer health insurance benefits for one employee and not do the same for another employee.
• Employers must create a written policy that establishes the benefits they offer their part-time employees in this regard. An example of this is Starbucks, as the company is known for offering great benefits for its part-time employees. They offer health insurance to part-time employees who have worked around 240 hours in a three-month period. Likewise, UPS has been known to offer similar benefits to both its part-time and full-time employees, regardless of how many hours they work per week. Companies must establish a policy for their employees and must ensure that the policy is applied consistently to all employees.

2. rules set by insurance companies

verifying with the insurance company is an essential step that employers must complete before they can begin offering health insurance to their employees.

• As well as policies set by employers, insurance companies also have policies they have set to offer health insurance benefits to part-time employees. employers should check them to make sure there are no discrepancies.
• Like some states, some insurance companies may also have a minimum participation rule. The minimum participation rule states that of all employees who obtain health insurance, a certain specified percentage of employees must also purchase and use the insurance. Should an employer decide to offer health insurance to part-time staff, he must understand that her participation rate may be affected. Employers should check with their part-time staff to make sure they agree to accept this offer.

pros and cons of providing health insurance to part-time employees

See also: Auto Insurance Shopping Guide – Auto Insurance

Offering health insurance benefits to employees is a great idea if a company wants to become more attractive to employees. however, for most companies, this might be out of the question for the simple reason that offering health insurance benefits costs a lot. health insurance premiums are expensive and tend to go up every year. Given the increased rates on top of the already high cost, most companies may find it difficult to offer it to part-time employees.

But before the thought of offering health insurance to part-time employees, it’s worth looking into some benefits of doing so.

• Because cost is one of the biggest concerns employers have when making the decision to offer health insurance benefits to part-time employees, it is important to note that all health insurance-related expenses are tax deductible. everything an employer spends on premiums can be deducted from your state and federal taxes.
• If employers are willing to do some paperwork, they can also ask their part-time employees to pay their premiums with their pre-tax dollars. the premium the employee must pay is deducted from her salary before taxes, which in turn increases the amount she takes home.
• small businesses can get additional benefits by offering health insurance to part-time employees. In 2010, the Affordable Care Act (ACA) added a new provision to the policy, called the Small Business Health Care Tax Credit. the tax credit small businesses get can include 50% of the premium cost for any two years. For small businesses to qualify for this benefit, they must pay at least half of their employees’ premiums. In addition, they must also have around 25 full-time equivalent (FTE) employees earning around $50,000 or less per year.
• Offering health insurance benefits to your part-time employees can help you attract more qualified job candidates. Several workers in the United States said that health insurance benefits can make or break the deal for them when looking for a job. some employees are even willing to receive a lower salary in exchange for health benefits.
• Offering health insurance benefits to your employees will ensure they stay with you longer, thereby lowering your hiring and onboarding costs. In some cases, the cost of hiring and onboarding employees can be equivalent to their salary for six to nine months.

Just as there are some advantages to offering health insurance to part-time employees, there are also some disadvantages for both employees and employers.

• Employers are free to offer health insurance benefits to part-time employees, regardless of the hours they work. however, part-time employees who receive tax benefits from their employers may be disqualified from receiving tax benefits or other savings if they wish to purchase coverage in the Marketplace. this also depends on how much the employee earns and affordability.

conclusion

Part-time employees who work at least 30 hours a week are eligible for health insurance benefits from their employers. Employers must establish a written policy and consistently provide these benefits to all employees who put in a similar number of hours and perform similar jobs. in accordance with the Affordable Care Act (ACA). employers who refuse to comply can be penalized.

how can deskera help you?

As a business, you need to be diligent about managing employee leave. deskera people allows you to comfortably manage vacations, attendance, payroll and other expenses. Generating pay stubs for your employees is now easy as the platform also digitizes and automates HR processes.

See also: Dental Emergency, No Insurance: How to Find Affordable Care

key points

• Businesses can hire both full-time and part-time employees to work for them. Any worker who works between one and 34 hours per week is considered a part-time employee.
• Other than the number of hours an employee spends at work, there is no other difference under the Fair Labor Standards Act between full-time and part-time employees.
• The Affordable Care Act (ACA) states that workers who put in a minimum of 30 hours a week should be considered full-time employees and their employers are required to offer them health insurance benefits.
• Employers must comply with the rules set forth in the Affordable Care Act (ACA) and by individual insurance carriers before they can offer health insurance benefits to their part-time employees.
• Employers must have a written policy setting out the benefits they offer to their part-time employees, and the benefits must be equal and consistent for all employees.
• Employers should check with their insurance carriers to make sure they can offer health insurance benefits to part-time employees.
• Many employers choose not to offer health insurance benefits to part-time employees because the cost of the premium is high and they may not be able to afford it.
• Giving health insurance benefits to part-time employees can be beneficial for businesses as they are allowed a full tax deduction on the premiums they pay.
• Employers should consult with part-time employees if they are interested in obtaining health insurance benefits, as in some cases it may be difficult for them to make other savings should they decide to shop at the marketplace.
• In the end, offering health insurance benefits to part-time employees comes down to costs and benefits

related articles