As An Employer, When Do I Need Insurance?

Navigating the catacombs of legislation on when Insurance is required and when it isn’t can be quite confusing to those not versed in legal language. We will try to make things a bit clearer here so that the rest of us know what the rules are instead of just those that make them.

Employer Health Insurance

Employer Health Insurance

The most commonly provided form of employer insurance is health insurance options for the employees. Any Company that employs 50 or more full time or equivalent employees regardless of state or industry is required by law to provide health insurance to their employees. The Insurance provided must also cover at the very least 60% of all covered expenditures for each employee. If it does not the employer then owes additional taxes due in payment to the IRS. Additionally, Employers can require their employees to pay towards their coverage. However they cannot require payments of more than 9.86% of their income. Failure to comply with any of these standards will require the employer to pay the tax fees as though they did not provide any insurance options at all. 

For those employers who have fewer than 50 employees instead of fearing punishment for not providing health insurance to their employees, they are encouraged by providing them with a tax break. The credit is equal to one half of the premium paid by the employer for the insurance. However this credit is only available to the employer if they comply with all of the following:

  • Have no more than 25 full time employees
  • Pay they no more than $54,200 annually on average
  • Cover all your full time employees
  • Pay at least half of the premiums for your employees
  • And purchase your insurance plan through a Small Business Health Options Program.

Workers Compensation

Each states requirements for workers compensation differ. And as a result so do the fees for not having workers compensation in place. But to be safe, we’d certainly recommend investing it it. With fees sometimes reaching as high as $100,000 not counting any court fees and other losses sustained, it can be a wonderful investment. Even states with next to no requirements for workers compensation insurance such as texas still require the following to provide workers compensation insurance:

  • Public employers
  • State Universities
  • Construction contractors
  • Transportation companies providing transportation over public highways
  • And employers of inmates to provide workers compensation to their employers.

Finding the best coverage for your business Can be a tricky business. Your best bet for getting the coverage you need is to talk to an insurance provider or broker near you. They have a lot of experience with the nuances of the law in the state you reside in.


To wrap things up, in general, if you are an employer of any kind, it is generally in your best interest to seek out all the insurance policies you can to keep yourself protected. If something can go wrong, it probably will, and protecting you and your source of income should be very high on your list of priorities.