Health Insurance

What’s the difference between a “large employer” and “small employer”?

According to the ACA, large employers are required to offer health insurance to their full-time employees, whereas small employers are not required to. Here’s a quick breakdown:

  • Large employers are defined as having more than 50 full-time equivalent employees.
  • Small employers have 50 or fewer full-time equivalent employees.

The exception is in California, Colorado, New York, and Vermont, where small employers are defined as having 1-100 full-time equivalent employees.

Note, a full-time equivalent employee count is different than just 50 employees—check out this article to learn how to calculate your count.

Below is a table to help clarify some of the differences between “large” and “small” employers, except for those in the previously mentioned four states:

Large employer Small employer
Definition More than 50 full-time equivalent employees 50 or fewer full-time equivalent employees
Requirements for health insurance Required to offer health insurance to all employees who work 30 or more hours per work Not required to offer health insurance to any employees

Heads up: These laws and definitions are subject to change. 

This article provides general information and shouldn’t be construed as legal, benefits, or HR advice. Benefits and insurance regulations may change over time and may vary by location and employer size. So, please consult a licensed broker or appropriately certified expert for advice specific to your business’s benefits options.