Employer provided health insurance question

I realize that there are differences between states and their individual laws, but as a rule, is an employer required to provide health insurance to its employees if the employer has more than a given number of employees?

For instance, if I have a business with 40 employees, would I have to provide insurance, but if I had only 20 employees would I not have to provide it?

It seems to me that the law that governs this is more of the ‘law’ of supply and demand. In order to attract employees, companies often have to offer health insurance etc.

I’ve known (in the past) of companies with a sizable staff that only had health insurance for a few (not routine). Doubt they could get away with that now. locally, even the fast food places are offering health insurance after x amount of time.

I’m not aware of any state or federal laws governing the availability of employee benefits.

Employers, by law, are not required to offer benefits at all (temp services come to mind), and I’ve had the misfortune of working for companies that offer no insurance at all.

Health insurance premiums are determined by a complicated formula based on what kinds of benefits are to be offered (i.e. preventive and emergency care only is much cheaper than comprehensive coverage), how many people are going to be covered (Joe’s Diner with ten employees is more expensive than, say, IBM with thousands or tens of thousands of employees.), what the employer’s contribution is going to be (some companies I’ve worked for have paid all of my premiums; others, and the federal government is notorious for this, have cost an arm and a leg). Requiring a deductible knocks costs down by making the employee pay for a significant share of the year’s initial costs.

The point of this explanation is that many companies, especially those which employ a small number or a number of low-wage-earners, choose not to offer insurance benefits at all.


When I worked for Empire Blue Cross and Blue Sheild many moons ago, the state law was that you had to offer health insurance if you had more than 20 full time employees. You didn’t have to pay for it, though. You could make the employess foot the whole bill. However group insurance cost a fraction of what individual insurance costs. The more people in your group, the cheaper the insurance.

Insurance laws change quicker than my old boyfriend idea of how long foreplay should last, so this all could be changed now.

In the U.S., there is no legal requirement to provide health care plans.

Arguably, in fact, one of the reasons that U.S. health care is so thoroughly screwed up is precisely because it has been largely provided by employers. If it were either up to individuals to buy their own (perhaps withe highly regulated policies available) or if it were provided by government, we would not be screwed up in the way we are. (We might be screwed up in different ways, of course, but that’s another story.)

As noted above, however, it is a competitive advantage in the labor market to offer health insurance. It’s still quite expensive (per capita) for small companies; large companies have more bargaining power with insurers and other health care providers.