A Guide to Offering Health Insurance to Employees

Everything Employers Need to Know to Get Started with Group Health Plans

If you’re a business owner, one of the most important benefits you can offer your team is health insurance. In today’s job market, having a strong health plan is not just helpful—it’s often expected. According to a 2024 survey by the Kaiser Family Foundation, nearly 59% of Americans get their health coverage through an employer-sponsored plan. For many job seekers, a health plan is a deciding factor when choosing where to work.

But how do you offer health insurance as an employer? What are the legal requirements? What does it cost? And how can you build a plan that meets your team’s needs without breaking your budget?

This blog will walk you through the step-by-step process of offering group health insurance to employees. Whether you’re just starting a business or looking to improve your current benefits package, this guide from Taylor Benefits Insurance will help you make informed, smart choices.

Why Offer Health Insurance to Employees?

Offering health insurance does more than just support your team’s health. Offering medical insurance to employees delivers a long-term positive outcome in several ways. If your employees have access to health care, they’re less likely to use extended sick leave and are more likely to be productive.

Not having to worry about taking their kids to see a doctor is good for the mental health of your employees as well. A great health insurance plan reduces the risk of employee burnout and promotes their overall wellness.

It also helps your business grow in several ways:

• Attracts top talent: Most skilled workers expect health insurance as part of a job offer.

• Improves retention: Employees are more likely to stay when they have access to good coverage.

• Boosts productivity: Healthier employees take fewer sick days and are more focused at work.

• Gives tax advantages: Employers can deduct contributions, and employees can use pre-tax dollars.

For small businesses, offering group health insurance can feel like a big step—but with the right support, it’s easier and more affordable than many realize.

Understanding the Healthcare Regulations

Before we move on to the cost and types of employee healthcare insurance plans, we have to address the rules and regulations that could impact your organization. Every business owner should understand two healthcare reform regulations when thinking about providing health insurance to employees.

First, the Employer Mandate, an essential part of the 2010 Affordable Care Act (ACA) or Obamacare, requires large employers to offer health insurance to all full-time employees.

Providing healthcare is no longer optional if your business has reached 50 employees. Employers failing to offer healthcare will be taxed with different penalties until they comply.

Another important regulation we’ve touched on is the Minimum Essential Coverage (MEC,) another vital element of ACA.

It is a provision requiring every citizen to enroll in an insurance plan that meets “minimum essential coverage.” This can be privately purchased insurance, a government program such as Medicaid, Medicare, or CHIP, and job-based plans provided by employers.

Who Needs to Offer Health Insurance?

Under the Affordable Care Act (ACA), businesses with 50 or more full-time equivalent employees (FTEs) must offer affordable health coverage that meets certain minimum standards.

If you’re under that 50-employee threshold, you’re not required by law to offer insurance—but many small businesses still do. Why?

• It helps attract and keep talent in a competitive market.

• There are tax credits available through the Small Business Health Options Program (SHOP).

• It improves morale and long-term employee satisfaction.

📌 Tip: Even if you’re not legally required to offer coverage, offering a basic group plan can be a major advantage in recruiting and retaining employees.

Step 1: Understand the Types of Health Insurance Plans

Before you offer coverage, it’s helpful to know the main types of health insurance plans you might provide.

1. HMO (Health Maintenance Organization)

• Lower premiums and out-of-pocket costs

• Requires employees to use a set network of doctors

• Requires referrals for specialists

2. PPO (Preferred Provider Organization)

• More provider choices and flexibility

• Higher premiums and deductibles

• No referral needed for specialists

3. EPO (Exclusive Provider Organization)

• Like an HMO but usually without needing referrals

• No out-of-network coverage (except emergencies)

4. HDHP (High Deductible Health Plan)

• Lower monthly premiums

• Higher out-of-pocket costs before coverage begins

• Can be paired with a Health Savings Account (HSA)

Your choice depends on budget, employee needs, and the level of flexibility you want to offer.

Step 2: Decide How Much You’ll Contribute

As an employer, you aren’t expected to pay 100% of the premium—but most companies share the cost.

• The average employer contribution for single coverage is around 83%, and about 73% for family coverage (source: Kaiser Family Foundation, 2024).

• You can choose to contribute a fixed amount or a percentage.

• The more you contribute, the more appealing the benefit becomes to employees.

💡 Taylor Benefits Tip: We help you compare plans and contribution strategies so you can find a solution that fits your budget and meets ACA standards.

Step 3: Choose a Health Insurance Provider

You can shop for plans on your own or work with a licensed health insurance broker like Taylor Benefits Insurance. Brokers are especially useful because:

• They help you compare quotes from top insurers

• They explain plan differences in plain language

• They ensure you comply with federal and state laws

• They offer ongoing support for enrollment, renewals, and employee questions

Working with a broker is free for employers—they’re paid by the insurance carriers, not you.

Step 4: Decide Who’s Eligible

Most employers offer coverage to:

• Full-time employees (30+ hours per week)

• Spouses and dependents (optional but highly valued)

You can also choose to cover:

• Part-time workers

• Domestic partners

• Temporary or seasonal employees

Once you decide who’s eligible, be clear about it in your employee handbook or benefits documents.

Step 5: Handle Enrollment Periods

You must offer employees a window to enroll in the plan, either when:

• They are newly hired

• It’s annual open enrollment

• They experience a qualifying life event (marriage, birth, job loss, etc.)

Employees must decide during these windows, or they may have to wait for the next open enrollment period.

Make sure your team understands:

• What the deadlines are

• How to enroll

• What documents they may need (like dependent info)

Taylor Benefits helps employers manage enrollment and can even provide virtual tools to simplify the process.

Step 6: Stay Compliant with Laws and Regulations

There are a few important laws you’ll need to follow when offering health insurance:

• ACA (Affordable Care Act): Requires large employers to offer minimum essential coverage.

• ERISA (Employee Retirement Income Security Act): Requires clear documentation of benefits.

• COBRA: Requires you to offer continued coverage for certain employees after they leave (if you have 20+ employees).

• HIPAA: Protects the privacy of employee health information.

We know it can sound overwhelming—but Taylor Benefits will walk you through every step, help prepare the paperwork, and make sure your business stays fully compliant.

How to Buy Health Insurance for Your Employees

We’ve established that providing insurance for employees is important and discussed the cost and available group plans.

But reviewing the healthcare plans from insurance providers can be an overwhelming experience for employers new to that space. There are two ways a small business owner can purchase employee health insurance.

Buying Directly

Are you wondering, “How to offer health insurance to my employees, and where can I find the best plans?” For some business owners, buying directly from the private health insurance marketplace is the way to go.

Your location and other factors will impact the availability of the plans available, but if you have experience buying health insurance, this could be a great option. Some of the largest private health insurance exchanges include Right Opt, Aon, Mercer, and Via Benefits.

However, there is another option for buying health insurance for employees directly. You can search for the best health care plans via a federal program called Small Business Health Options Program or SHOP.

Every U.S. state has its own SHOP marketplace, though they’re similar in what they offer. To qualify for a SHOP plan, your business must have up to 50 employees, and 70% of them must be enrolled in the program. You also must have an office in the state where you want to access SHOP.

Buying via Health Insurance Broker

Manually comparing health care plans for employees can be incredibly time-consuming, and it’s too easy to make the wrong choice.

That’s why many business owners choose to rely on the service of a health insurance broker. A trustworthy and competent broker can break down the most complicated aspects of purchasing health care plans and explain them to you.

They are the expert that can provide an accurate comparison between all available policies and guide you in finding the best one for your team.

Ideally, they will be laser-focused on cutting back the cost of premiums and waste as little of your time as possible. Furthermore, if you need to file an insurance claim, brokers can help guide you through it.

Optional Add-Ons to Make Your Plan Even Better

You don’t have to stop at medical coverage. Many employers offer additional health-related benefits that make a plan more attractive:

• Dental insurance

• Vision insurance

• Health Savings Accounts (HSAs)

• Flexible Spending Accounts (FSAs)

• Wellness programs

• Telehealth access

These extras are often affordable to add and show your team that you care about their overall well-being.

Costs and Tax Benefits for Employers

Health insurance isn’t just good for employees—it can also help your bottom line.

Cost Control:

• You set the budget—choose how much to contribute and what kind of plan you offer.

• Choose plans with different deductibles or networks to lower premiums.

Tax Benefits:

• Your contributions are tax-deductible as a business expense.

• Employees can pay their portion with pre-tax dollars, lowering payroll taxes.

• Small businesses with fewer than 25 full-time employees may qualify for federal tax credits through the SHOP marketplace.

Taylor Benefits can help calculate what kind of credits or savings you might qualify for and structure your plan accordingly.

How Taylor Benefits Insurance Helps You Offer the Right Plan

At Taylor Benefits Insurance, we specialize in helping employers find affordable, effective group health insurance plans. Here’s how we support you:

✅ Compare plans from top insurers side by side
✅ Build customized packages that fit your team and budget
✅ Ensure you’re compliant with all state and federal rules
✅ Assist with open enrollment and employee communications
✅ Provide ongoing support for claims, renewals, and questions

We’re not tied to any single insurance carrier. That means our job is to find what’s best for you, not just push a product.

Final Thoughts

Offering health insurance might seem complicated, but it doesn’t have to be. With the right guidance, you can provide real value to your employees while also helping your business grow.

Whether you’re required to offer insurance or doing it to build a better workplace, the benefits go far beyond just medical coverage. A smart, well-structured health plan shows your team that you care—and helps you stand out in today’s competitive job market.

📞 Need help designing a group health plan for your employees?
Contact Taylor Benefits Insurance at 800-903-6066 for a free consultation and let us help you take the next step.