Small Employers in Ohio – Do You Have To Offer Health Plan Coverage?
Lyndsey R. Barnett
The short answer is no. But if you offer coverage to some employees, you have to offer it to all “eligible employees.”
If you have fewer than 50 full-time equivalent employees, you are not subject to the pay or play penalties under the ACA if you fail to offer health plan coverage to your full-time employees. However, if you are a small employer there may still be a state law impacting health plan eligibility. A small employer in Ohio (defined as an employer with 2 – 50 employees) will not be penalized for failing to provide a group health plan for its employees. However, if a small employer offers group health plan coverage to any employee it must offer coverage to all “eligible employees.” An “eligible employee” is defined as any employee “who works a normal work week of thirty or more hours.”
This law is not new. In fact, until several years ago, the law was more restrictive requiring small employers to provide coverage to all employees if they worked 25 or more hours per week. In 2015, the Ohio law was modified to more closely parallel the ACA by increasing the 25 or more hours per week to 30 or more hours per week. The good news though for small Ohio employers is that the determination of who is considered a full-time employee under Ohio law is much simpler than the determination under the ACA. The Ohio law is based on the employees normal work week opposed to under the ACA where employers must choose to use either the monthly or lookback methods of actual hours worked. The Ohio law also permits an employer to exclude temporary or substitute employees and well as seasonal employees, which is less restrictive than the ACA provisions which do not allow exceptions to the penalty for any categories of full-time employees.
If you are a small employer in Ohio and not currently offering coverage to all employees regularly scheduled to work 30 or more hours per week, you should seek counsel to determine if you are in violation of Ohio law.