What small employers commonly offer

Health coverage usually sits at the center. A small business can buy a small-group plan from an insurer, enroll through its state’s small-business marketplace, or fund a health reimbursement arrangement that repays employees for individual policies they pick themselves. Around that core come the ancillary benefits: dental, vision, group term life and disability income. The dental, vision and life guide in the list below walks through each one and the tax rules that come with them.

In California, the small-business marketplace is Covered California for Small Business. To use it, an employer needs 100 or fewer full-time equivalent employees and at least one W-2 employee who is not the owner’s spouse, so a business run by its owner alone does not qualify there. Outside the marketplace, small-group plans are also sold directly by insurers.

Does a small business have to offer health insurance?

Under federal law, generally not. The Affordable Care Act’s employer shared responsibility rules apply to an applicable large employer, which the IRS defines as one that averaged at least 50 full-time employees, counting full-time equivalents, during the prior year. Full-time means an average of at least 30 hours of service a week, or 130 hours in a month. Companies under common ownership are usually counted together, so two related businesses of 30 people each can cross the line as a group.

Smaller employers that choose to offer coverage can look at the Small Business Health Care Tax Credit. It is open to employers with fewer than 25 full-time equivalents and average wages under an inflation-adjusted limit that pay at least half the cost of employee-only coverage on a qualified plan bought through the SHOP Marketplace. The credit reaches up to 50% of premiums paid, or 35% for tax-exempt employers, shrinks as headcount and wages rise, and can be claimed for two consecutive tax years on Form 8941.

When employees work from other states

Insured health plans are regulated state by state, and a small-group plan is generally built around the state where the employer’s main business site sits. HealthCare.gov’s guidance for SHOP employers with workers in several states is to enroll in the state of the primary business site and choose one plan with a multi-state or national provider network. A national label on a plan is not the same as good local access, so check the network in the town where each remote employee actually lives.

Some employers skip the group plan entirely. With an ICHRA, which CMS now also calls a CHOICE Arrangement, the business gives employees tax-free money toward individual health insurance they buy themselves, and CMS names a workforce spread across several states as one reason to choose it. Employers under 50 also have the QSEHRA. The guide to remote employees in other states covers both.

When employees live in another country

A hire abroad brings a different set of questions. Each country sets its own rules on public health cover and on what an employer has to contribute, so the answers start with local law rather than with the plan you run at home. An international group plan can sit on top of that local cover or, in some countries, stand in for part of it. Which applies is a country-by-country answer, and the international overview below sets out the questions to ask.

The hiring setup matters just as much. Hiring through an employer of record, a third party that becomes the legal employer in that country, is one common route for a company with no local entity. A professional employer organization is generally a domestic arrangement that needs the client to have its own entity. Paying someone as a contractor generally leaves health cover to the worker, though the label has to match how the work is really done. The guide to EOR employees and contractors abroad compares the three.

The business insurance that follows a remote team

Health benefits are only part of the picture. California requires every employer with one or more employees to carry workers’ compensation, and a permanent home-based employee in another state is generally not treated as incidental work, so that state usually needs to be listed on the policy and reported to the insurer. North Dakota, Ohio, Washington and Wyoming run monopolistic state funds, which a private policy will not cover.

Remote work also touches employment practices liability, since hiring and managing people in several states brings several sets of employment rules, and cyber insurance, since company data now lives on laptops in home offices. These are lines we handle: we request the change or the quote, and the insurer decides terms after reviewing the business. The remote teams guide goes through each one, and the related pages below cover the policies.

How a benefits introduction works

Our part on the health side is simple. We explain the options in general terms, and when you ask, we introduce you to a benefits partner that works with remote and international health coverage. Decisions on eligibility, plans and pricing belong to the partner and the insurer, and the partner takes the conversation from there. We stay your contact for workers’ compensation, employment practices liability, cyber and the rest of your commercial insurance.

Because rules on benefits, payroll tax and employment vary by state and country, treat these guides as a starting point. Where a decision carries legal or tax weight, such as classifying a worker or setting up a reimbursement arrangement, check it with a local adviser or a tax professional before you act.

Every guide in this section

Start with the guide that matches your team, then use the country pages for the places your people live.

Health insurance for remote employees, country by country:

Ask for an introduction

Use the quote form on this page. List the states or countries where your people live, how many work in each place, and whether you want to include spouses and children, and we will pass the details to a benefits partner. It helps to add the coverage the team has now and how each person is hired.

A few useful answers

Common questions

Does a business with fewer than 50 employees have to offer health insurance?

Federal law does not require it. The ACA’s employer shared responsibility rules reach applicable large employers, meaning those that averaged at least 50 full-time employees, counting full-time equivalents, in the prior year. A smaller employer that offers coverage anyway can check whether it fits the Small Business Health Care Tax Credit.

Can Mithril1 set up health benefits for my employees?

We can introduce you to a benefits partner that handles health coverage for remote and international teams. Eligibility, plan options and pricing rest with that partner and the insurer. We remain your contact for commercial lines such as workers’ compensation and cyber.

What should I gather before asking for a benefits introduction?

Note where each employee lives, how many people are in each state or country, whether dependants should be covered, what coverage the team has today, and how each person is hired: on your payroll, through an employer of record or as a contractor.

Is an employer of record the same as a PEO?

They work differently. A PEO shares employer duties with a client that already has its own entity, and it is generally a domestic arrangement. An employer of record becomes the legal employer in a country where your company has no entity of its own.

Does a remote employee in another state change my workers’ comp policy?

Usually. A permanent home-based employee is generally not incidental work, so that state normally goes on the policy. Tell us before the start date and we request the change; the insurer decides how it is written.

Employee Benefits for Small Businesses