Let’s be honest: hitting the 50-employee mark for your business is a big milestone. It’s a sign of growth, sure, but it also comes with some headaches—especially when it comes to benefits. Ever wonder why crossing that 50 employee threshold feels like you suddenly have a new rulebook to follow? You do. And the stakes are real.
If your business now has 52 employees, you’re officially on the radar for the Affordable Care Act’s (ACA) employer mandate. That means you have benefits requirements for 50+ employees—and that can feel like a big jump. But before you get overwhelmed, let’s break down what you really need, what’s affordable, and how to avoid the common mistake that trips up many small business owners like you.
Why Benefits Matter—More Than You Think
Often, small business owners think benefits are just about meeting legal requirements or handing out health insurance cards. But here’s the truth: good benefits are a powerful competitive advantage. Why? Because benefits help you attract and keep great people, which is what growing businesses live and die on.
Think of benefits as part of your business’s story. If you want to compete with bigger companies for talent, it’s not just about the paycheck—employees want security, flexibility, and perks that show you care.
So, what’s the catch?
Offering benefits can feel expensive. The usual rule of thumb is that benefits run about 5-10% of your payroll. That might not sound bad until you do the math on your total payroll. Suddenly, you’re looking at a hefty chunk of your budget going to benefits—and not every business can swing that without smart planning.
Understanding the ACA Employer Mandate
Here’s what the law says. Once you hit 50 full-time equivalent employees, you are considered an Applicable Large Employer (ALE) under the ACA. This means you’re required to:
- Offer health insurance coverage that is affordable and provides minimum value to at least 95% of your full-time employees (and their dependents); or Potentially pay a penalty if you don’t offer coverage and at least one employee qualifies for a premium tax credit through HealthCare.gov.
Ignoring these benefits requirements for 50+ employees isn’t just risky—it can be expensive.
Sound too good to be true?
Here’s the kicker: there are ways to meet these legal requirements without breaking the bank. That’s where alternatives like QSEHRA and ICHRA come into play.
Affordable Health Coverage Alternatives: QSEHRA and ICHRA
QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) lets small businesses reimburse employees for individual health insurance premiums and qualified medical expenses, up to a set amount each year. It’s a flexible way to support employees’ health coverage without footing the entire bill.
ICHRA (Individual Coverage Health Reimbursement Arrangement) is similar but allows for more customization. You can customize reimbursements by employee class—for example, full-time vs. part-time—and offer varying amounts based on job status or age.
Feature QSEHRA ICHRA Who qualifies Employers with fewer than 50 employees Employers of any size, including over 50 employees Employee flexibility Employees buy individual insurance; employer reimburses Employees buy individual insurance; employer reimburses Custom reimbursement No (same amount for all) Yes (can vary by class) ACA employer mandate Does NOT satisfy mandate for ALEs (50+) Can be used to satisfy mandate if designed properlyWhile QSEHRA is handy for companies just under the 50-employee line, if you’ve crossed 50, ICHRA offers a way to provide compliant benefits while maintaining budgeting control.
Leverage Tax Credits Like the SHOP Program
Here’s another tip for saving cash: if you’re buying group health insurance, check whether you qualify for tax credits through programs like the SHOP Marketplace. These credits can reduce your premium costs by up to 50%—an enormous help when paying for coverage for 50+ employees.
How to check eligibility? Use tools like Workast to manage your workforce efficiently and keep precise employee counts. This helps ensure your filings and benefits calculations are accurate, so you don’t miss out on credits.
Tax credits are time-limited and depend on employee count and average wage, so don’t leave money on the table.
Avoid This Common Mistake: Ignoring What Employees Actually Value
Ever wonder why some companies splurge on fancy perks like ping-pong tables and daily catered lunches but still lose employees to startups in the same city? It’s because they ignored the basics that matter most to employees—flexible time off, dependable health coverage, and financial security.
Low-cost, well-chosen non-medical perks often deliver more bang for your benefits buck than flashy extras. Think:
- Clear, generous PTO policies—because rest matters. Flexible working hours or remote work options. Simple wellness programs like discounted gym memberships or mindfulness apps.
Employees notice when benefits are designed for their real needs. These low-cost perks can improve morale and reduce turnover much more effectively than some pricier alternatives.
Putting It All Together: Your Benefits Game Plan at 52 Employees
Review the ACA employer mandate: Make sure you understand your legal requirements to avoid penalties. Explore health coverage alternatives: If full group coverage is too expensive or complicated, look into ICHRA to offer compliant health benefits with budget control. Apply for tax credits: Use programs like SHOP to reduce health insurance costs. Prioritize the basics: Work on PTO policies and simple non-health benefits employees actually want. Use tools to stay organized: Platforms like Workast can help you track employee numbers and benefits administration effectively. Communicate transparently: Employees value knowing what’s offered and why. Don’t just hand out benefits; explain how they help. attracting talent with benefitsFinal Thoughts
Crossing the 50 employee line doesn’t mean your business has to be overwhelmed by benefits requirements. With smart choices—understanding the ACA employer mandate, using flexible options like ICHRA, leveraging tax credits, and focusing on employee priorities—you can make benefits work for you without blowing your budget.
Remember, benefits aren’t just a cost; they’re an investment in your company’s future. And when done right, they become a key ingredient in attracting and keeping the talent that will take your business to the next level.
Want a starting point? Head over to HealthCare.gov for resources on the ACA and SHOP, and check out Workast to get your employee management on track. Your 52 employees will thank you—probably even more than for adding that ping-pong table.