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Do Small Businesses in Arizona Have to Offer Dependent Health Insurance Coverage?

Many Arizona small business owners are unsure exactly what the laws are for offering dependent health insurance coverage. Find out here.
Monday, 20 April 2020
Dependent Health Insurance Coverage to Your Employees: Yes or No? Dependent Health Insurance Coverage to Your Employees: Yes or No?

Arizona has no law requiring small business owners to provide dependent health insurance coverage for employees. In fact, there’s no law that requires small business owners with fewer than 50 employees to supply any type of medical coverage for their employees. 

Businesses that have more than 50 full-time employees have to provide health insurance for their workers. However, as stated above, companies that have less than 50 employees have the choice of whether or not to provide coverage. Even when those smaller companies do choose to offer coverage to their workers, they don’t have to extend that coverage to dependents.

While small businesses in Arizona are not obligated to supply employee health insurance benefits, lots of small business owners do choose to offer a health plan to employees. Providing health insurance coverage can prove to be a helpful tool for recruitment and retention of key staff. There are, though, regulations for small companies that choose to offer coverage to their employees.

Related: Offering the Best Health Insurance Employee Benefits Helps Attract and Retain Great Talent

Offering Dependent Health Insurance Coverage

The health insurance plans offered by small businesses in Arizona usually permit employees to add qualified dependents to any plan. But employers can choose whether or not they cover dependents, as well as workers. 

So, who are dependents in Arizona? They include: 

  • The children of employees. This includes stepchildren, adopted children, and foster children under the age of 26.

  • Siblings and descendants of the employee’s children. This counts even when those siblings are not the biological child of the employee.

  • Adult relatives who have a gross income of less than $3,000. Another person cannot have already claimed those relatives as a dependent on their taxes.

  • Any other adults living in the employee’s home for more than 12 months who also meet the criteria. 

Employees Can Pay for Dependent Health Insurance Coverage Premiums

Owners of small businesses who choose to offer health coverage to their employees don’t have to pay the coverage premium. Still, most plans do permit employees to add qualified dependents to the plan, even if the business owner chooses not to contribute to the plan premium.

Group Health Coverage for Small Business Owners

Federal law guarantees that small business owners can have group health coverage should they want it, regardless of the medical status of the employees. Again, any business with fewer than 50 full-time employees qualifies as a small business. 

Usually, the owner is also an employee. Therefore, it will include sole proprietorships as long as they have a single employee. Partnerships without any employees count as well.

One rule applies, though. If employers offer a group health insurance plan to any full-time workers, they have to offer coverage to all employees. 

Employers are also able to choose if they offer coverage to any part-time employees. These are employees working for less than 30 hours a week. If they offer coverage to any part-time workers, employers must give all workers the option of taking up the plan.

Typically, a group health insurance plan will include dependent health coverage as well for eligible employees. Those dependents can include spouses, children, and often unmarried domestic partners. But dependents cannot enroll unless the employee has also enrolled. A group health insurance plan will extend coverage to adult dependents under the age of 26.

What Does the Employer Have to Pay?

The amount paid in premiums by small business owners will vary depending on which plan they choose. Some choose to pay the whole premium themselves. Others ask their employees to bear some of the costs. 

Furthermore, businesses can take advantage of tax credits that offset the costs of insurance. Employers should consider tax credits when working out how much of the premium to pay.

Choosing A Health Plan for A Small Business in Arizona

Remember, legally, small business owners in Arizona don’t have to provide any medical coverage for employees. They also have no obligation to offer dependent health insurance coverage for employees’ dependents. 

However, offering health coverage does come with many employee benefits. When an organization offers health insurance plans, it’s possible to attract more talent. It can also increase the rate of staff retention and boost productivity in the workplace.

If you want to choose a group health plan for your small business, look no further than Anderson Insurance Services. We can help employers in Arizona select the best insurance solution for them. We know how important employees are to any small business, and we strive to present you with only the best options that will meet your requirements. Whether you just want coverage for workers or you want to offer dependents health insurance coverage too, we can help. 

Give us a call today to get started!

Before You Go

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