New York is home to many small and medium-sized businesses while having one of the largest economies in the U.S.

According to a 2021 Empire State Development report, 98% of New York businesses have fewer than 100 employees. This makes small employers a significant part of the state economy.

As a New York business owner, you may have questions about how small business health insurance works in your state. Read below for the answers to all your questions about small business health insurance in New York:

1. How do I qualify for small business health insurance in New York?

You must meet the following New York State small business health insurance requirements, per the Department of Financial Services, to be eligible for group plans in the state:

• Your business must be located within New York State.
• Your business must have had between 1 and 50 full-time or full-time equivalent (FTE) employees over the past calendar year.
• At least 30% of your employees who are offered health coverage earn $45,450 or less in annual wages. The wage level is adjusted every year to account for inflation.
• Your business must not have previously provided group health insurance coverage to your employees within the past 12 months.

If you are the owner of a sole proprietorship in New York, you should know that you usually would not qualify for small business health insurance unless you had eligible full-time or full-time equivalent employees. As a sole proprietor with no employees, you would instead qualify for individual health insurance in New York. Learn more about affordable individual health insurance plans with eHealth.

Another option for small business owners may be ICHRA (Individual Coverage Health Reimbursement Arrangement) plans. This is an affordable option for small business owners who wish to offer health coverage for workers. Here’s how it works: employers set aside a certain dollar amount per employee to go towards their health coverage. The employee chooses and buys a health plan on his own and is then reimbursed by the employer with pre-tax funds. One benefit on the employee end is they can choose the exact plan they want, and many employers find the ICHRA program to be easier to manage when it comes to healthcare costs.

2. What are my obligations as a small business after enrolling in a New York group plan?

According to New York’s Department of Financial Services, in order to participate in HealthyNY, employers must meet all of the following New York State small business health insurance requirements:

• As the employer, you contribute at least 50% to paying for monthly employee premiums.
• 50% of your eligible employees participate in the group health insurance program. Employees who have health insurance through another source (including a spouse or government program) can count toward the 50% participation requirement.
• The plan is offered to all employees who work 20 or more hours per week and are paid $43,450 or less (adjusted annually).
• At least one employee who earns wages of $43,450 or less enrolls in the plan.

Once you offer group health insurance coverage and meet New York State requirements, your business may have access to significant tax advantages.

For example, the monthly employee premiums that your business pays are usually 100% tax deductible. Offering small business health insurance can also mean reduced payroll taxes.

3. How do I qualify for the small business insurance tax credit?

As a New York small business owner, you may be eligible for a health tax credit to help you afford the cost of offering group health insurance to your employees.

Typically, the requirements to qualify for a small business health insurance tax credit in New York are:

• Your business has 25 or less full-time or full-time equivalent employees.
• Your business pays an average annual salary or wage of less than $53,000 a year per worker (this amount is indexed annually for inflation).
• Your business contributes at least 50 percent toward paying for the cost of employee premiums (specifically, your employees’ lowest cost single tier coverage).
• Your business offers Small Business Health Options Program (SHOP) plan coverage to all full-time employees.

If your business qualifies for the small business health insurance tax credit, then the maximum available federal reimbursement for your company is up to 50% of the premiums you pay for employees’ medical, dental, and vision coverage for up to 2 consecutive years.

The small business health insurance tax credit is offered on a sliding scale. This means that the smaller your group, the more likely your New York business will benefit from the tax credit.

For example, if your New York business has less than 10 full-time equivalent employees who are paid wages less than $25,000 annually, then your company may be eligible for the maximum tax credit amount.

4. How do I find small business health insurance in New York?

It’s fast, free, and easy to use eHealth to get affordable New York health insurance for your business.

With eHealth’s online marketplace, you can:

• Compare plans from multiple insurance companies
• Find personalized quotes
• Get unbiased support and advice from licensed health care agents

You can get started today from the comfort of your own home. Just enter your zip code into the plan finder tool on this page to start shopping. Or, if you need help along the way from a trusted licensed insurance agent, contact us today to speak with an eHealth agent and get your questions answered.

This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice. Group and employee definitions vary by insurance company and state, so be sure to check with a licensed insurance agent to find out the details for your specific situation.