If you work for or own your own small business, providing or finding
affordable and comprehensive health insurance can be even more difficult than usual. In fact, a recent survey found that more than half of small business owners in California don’t provide health insurance for their employees. The cost for providing health insurance for an employee averages over $3000 a year.
This is despite a requirement under California health insurance laws stating
that small group health insurance must be available to any small business that
otherwise qualifies for group health insurance.
By law, any small business (defined as 2 to 50 employees) in the state of
California must be offered the same health insurance for small businesses that
is offered to other small businesses.
Coverage cannot be denied as long as a company pays their premiums, has been in
business for at least two months and offers coverage to all eligible employees,
including any who work part time.
An insurance company may also specify a minimum acceptable number of people to
enroll in their plan otherwise they do have the right to withdraw the insurance.
The health insurance may be revoked if the required minimum number of employees
Under California law, it’s also illegal for an insurance company to refuse
coverage based on the health of the insured group – coverage may vary based on
employees’ average age and location.
And those companies that do bother to provide health insurance are cutting back
on benefits or employer contributions – around 25% of employers said they have
had to either reduce benefits or make their employees responsible for more of
Apart from being a requirement, health insurance for employees of small
businesses makes financial sense – as well as being an excellent way of keeping
employees happy and reducing absenteeism, there may be major tax benefits. In
general, expenses related to health insurance are entirely tax-deductible when
incurred by an employer.