Compliance with the Affordable Care Act (ACA) isn't optional for large employers — and the case for offering coverage goes well beyond avoiding penalties. Here are five reasons to offer health insurance:
The fringe portion of the prevailing wage was intended to provide benefits like health insurance and retirement plans for your workers. Using the fringe as intended protects your employees, helps you comply with the ACA, and reduces your payroll burden, which subsequently results in reducing taxes overall.
Some contractors have been reluctant to use the fringe to provide benefits, worried that employees will quit when they no longer get these dollars as additional cash wages. Now every contractor is in the same boat — and obtaining coverage pre-tax through an employer is much easier and less expensive than purchasing it on an individual basis.
As of 2026
The individual-mandate penalty was reduced to $0 in 2019, but employer-sponsored coverage remains far cheaper for workers than individual-market plans, and the employer mandate still applies to companies with 50+ FTEs.
If you're a small company, how will you stack up against a larger competitor who is mandated to provide health insurance, and can submit bids that reflect the payroll savings this creates?
Proof of coverage may be a requirement to qualify for government contracts. Several municipalities including Memphis, TN, and Athens, OH, require that bidders prove they offer minimum health insurance coverage to employees. It's reasonable to expect that this could be required for projects funded by the federal government.
There's no reason to navigate the ACA landscape on your own. We've specialized in providing bona fide benefits for more than 40 years, and we're ready to help you stay compliant with the Affordable Care Act and beyond.