Navigating Benefits

Benefits and Insurance for Part-Time Employees: What’s Required?

  • Health insurance is the only mandatory benefit (unless fewer than 50 full-time employees)
  • You can offer limited benefits to part-time employees
  • You can help part-time employees find benefits on their own
Posted by July 23, 2017

If you hire part-time employees, should you give them benefits? More importantly, will you get in trouble if you don’t? To help you figure out the right approach, we look at the requirements for benefits and insurance for part-time employees.

Health Insurance for Part-Time Employees

Health insurance is the only benefit you are legally required to offer to your employees and this only applies if you have 50 or more full-time equivalent employees.

If so, you need to offer a health insurance plan to every employee who averages 30 or more hours per week.

If you define full-time as 40 hours per week, then any part-time employee who works more than 30 hours a week must also be offered your health insurance plan. If a part-time employee does not average more than 30 hours a week, you do not need to offer them health insurance.

Other Benefits

The government does not require you to offer other benefits like dental, life insurance, paid time off or a retirement plan. You decide whether to offer these benefits and to which groups of employees. You can decide to only cover full-time employees or only offer limited benefits to part-time employees.

There is one exception: if an employee works more than 1,000 hours a year and you have a group retirement plan like a 401(k). In this case, the employee must be allowed to participate, even if they are part time and part-time employees are not allowed in your retirement plan.

Advantages of Offering Benefits

While you are not required to offer benefits and insurance for part-time employees, it is still worth considering. Benefits are a great way to reduce turnover and this is just as true with part-time employees. They will be less likely to move to another job if they receive company benefits.

Employees with benefits are also happier employees so they will be more engaged and productive in the workforce. It can also help keep your workforce healthy. You do not want an unwell part-time employee to come to work because they do not have benefits and then they get your other employees sick.

Drawbacks

On the other hand, offering benefits to more employees will increase costs because you are covering more people. This creates extra paperwork and administrative work for your HR department as they deal with enrolling more people and teaching them about your benefits. Finally, turnover is higher with part-time employees which creates even more administrative work, as more people join or leave your benefits.

Effective Part-Time Benefits

There are some strategies you can use to offer effective part-time benefits while keeping costs and administrative work under control. You could set up a requirement for a minimum amount of days worked before a part-time employee is eligible for benefits, like they need to work at least two months. This way you don’t enroll people who quit immediately.

You could also only make some of your benefits available to part-time employees. For example, you offer benefits with simpler enrollment like paid time off, sick days, commuter tax benefits and company discounts. You leave the benefits with more enrollment paperwork like disability and life insurance and the retirement plan for your full-time staff.

Helping Part-Time Employees

If you do not want to offer benefits to part-time employees, you can still help them find benefits on their own. Ask your health insurance representative if they can enroll your part-time staff through individual plans.

You could also ask your other benefit providers what kind of benefits they offer for individuals and part-time employees. These companies are always looking for new clients and can assist your part-time staff.

By considering this information, you can find the right solution that works for your company and your part-time employees.

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