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Ron Bland • June 5, 2024

Health Insurance Requirements For Part Time Employees In California

Written by: Ron Bland, GBDS

If you have any involvement in the employee benefits program at your California company, you may be aware of regulations regarding full-time and part-time employees and health care benefits. Depending on the status of the company and its part-time employees, these changes may be significant. Do part-time employees get benefits? What is considered a part-time employee, and what strategies may best benefit companies impacted by the changes?

Health Insurance for Part-Time Employees in California

The Affordable Care Act (ACA) requires that all Americans have health insurance or pay a tax penalty, but does this mandate extend to part-time employees? 


Currently, California state law does not require employers to provide health insurance for their employees. However, federal law states that companies with 50 full time employees or more must provide health benefits to a standard of minimum essential coverage.


Health Insurance Requirements for California Employers

The first part of the regulations requires Californians to obtain health care coverage at minimum standards. Coverage must be secured for individuals, spouses and partners, and children residing in California. Those not complying could face additional state taxes. Additional subsidies are available to help cover the cost of health care when purchased from CoveredCA.com.


Regulations also mandate that employers with 50 or more employees working full-time (30 or more hours weekly) are required to provide at least minimal levels of healthcare insurance. Employers with 50 or more employees are referred to as "Applicable Large Employers", ALE.


Employers with fewer than 50 full-time employees are not required to provide healthcare coverage. While small employers with 50 or fewer employees are not required to offer coverage, if they decide to offer it, coverage must meet ACA minimum standards.


For companies who may see this 50 employee mark as being avoidable by simply converting more full-time employees to part-time employees, there is the issue of equivalents. Now, hours worked by part-time employees have to be counted as a portion of a full-time employee. For example, all part-time hours are added up and divided by 120 to determine the number of “equivalent” full-time employees. These are added to the number of full-time employees already on staff. This is designed so employers will not just slash full-time staff to avoid health care benefits compliance. It is important to note that employees in each classification, full or part-time, be treated equally when benefits are offered.


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What Constitutes Part Time Employment In California?

A part-time employee is defined as someone who works less than 30 hours per week. When it comes to regulations, however, few things ever seem to occur at their simplest. There may be lower-end minimums for part-time workers, like 15 hours weekly. Generally speaking, small group insurance carriers only consider those working 20 hours or more per week. Below that, employees may be considered below the threshold to be considered for benefits.


How far back do they look when calculating part-time hours? While individual carriers may have their own guidelines, frequently it is one-half of the previous quarter's hours for part-timers. It is also important to note that part-time workers are W2 employees and not contract workers or 1099 workers. Contract workers are not counted as full or part-time employees. Some employers may attempt to take advantage of this by referring to some employees as contract workers. This can lead to significant issues for employers who misclassify workers.


Do Employers Have to Offer Health Insurance to Part-Time Employees?

Under the ACA, employers with 50 or more full-time employees (including full-time equivalents) are required to provide health insurance or face penalties. This calculation includes part-time employees when determining full-time equivalents. However, the ACA does not mandate that health insurance be offered to part-time employees specifically. Many employers, nonetheless, choose to offer these benefits to attract and retain talent.

Do Part-Time Employees Get Health Insurance in California?

Yes, part-time employees can receive health insurance in California, but this largely depends on the employer's offerings and the employee's eligibility. While federal law under the ACA does not mandate coverage for part-time employees, many employers choose to offer it as a benefit to attract and retain a talented workforce.

How Many Hours Do You Have to Work to Get Benefits in California?

To qualify for health benefits, part-time employees generally need to work a certain number of hours per week. This threshold can vary by employer but often includes employees working at least 20 to 30 hours per week. Employers should set clear policies regarding eligibility for part-time employees to avoid misunderstandings.

What are the Mandatory Employee Benefits in California?

While health benefits are not mandated for companies of less than 50 full time employees, there are other benefits related to time off, work expenses, family, and injury that are required.


Family and Medical Leave

Companies employing a minimum of five individuals are obligated to offer up to 12 weeks of job-protected leave annually. This leave accommodates medical reasons, childbirth, adoption, or needs tied to active military service and their kin. Additionally, organizations must extend up to eight weeks of paid family leave for employees who must tend to a family member, establish a bond with a newborn, or manage needs related to military service.


Paid Sick Leave

Employers are required to allocate paid sick leave to employees for the diagnosis, care, or treatment of their own or a family member’s medical conditions. This provision also covers preventive care and instances of domestic violence, sexual assault, or stalking. A minimum of 24 hours (equivalent to three workdays) per annum is mandated.


Additional Time Off Entitlements

  • Pregnancy Disability Leave: Coverage for disabilities due to pregnancy.
  • Kin Care Leave: Utilization of sick leave to care for a family member.
  • Family Military Leave: Leave for family members of active-duty military personnel.
  • Bone Marrow and Organ Donor Leave: Leave for individuals donating bone marrow or organs.
  • School Activities Leave: Time off to participate in children's school activities.
  • School Discipline Leave: Leave for addressing issues related to school discipline.
  • Jury Duty Leave: Mandatory leave for serving on a jury.
  • Judicial Leave: Leave for court appearances.
  • Voting Leave: Time off to cast a ballot.
  • Election Official Leave: Leave for serving as an election official.
  • Military Leave: Leave for military service obligations.
  • Civil Air Patrol Leave: Leave for Civil Air Patrol service.
  • Literacy Leave: Leave for participating in literacy programs.
  • Drug and Alcohol Rehabilitation Leave: Leave for rehabilitation purposes.


Day of Rest Requirements

Employers must ensure that employees receive adequate days of rest in accordance with state regulations. California Labor Code Section 551, states all California employees are entitled to at least one day of rest out of every seven days. Section 552 prohibits employers from forcing and employee to work more than six days in a seven day period.


California Continuation of Benefits Replacement Act (Cal-COBRA)

This act mandates that businesses with two to 19 employees enrolled in a group health plan provide continuation coverage under Cal-COBRA. The notification requirements and premium structures differ from those stipulated under federal COBRA.


Workers' Compensation Insurance

Employers are mandated to carry workers' compensation insurance to cover employees in case of work-related injuries or illnesses.


Employee Expense Reimbursement

Organizations are required to reimburse employees for all necessary expenses incurred in the course of their duties, including costs associated with remote work.


Retirement Plans through CalSavers

Employers must facilitate access to retirement savings plans for employees via the CalSavers program. By adhering to these requirements, California employers ensure compliance with the state's intricate labor laws while fostering a supportive and equitable work environment for their employees.

Benefits of Offering Health Insurance to Part-Time Employees


1. Improves Employee Retention

Health care benefits encourage employees to stay with an employer and make it a bit more challenging to change employers. When companies offer health care benefits, it places more weight on their side of the scale.

 

2. Attracts New Talent

A company that offers health care benefits has an advantage when recruiting new employees. This is particularly true if their current employer doesn't offer such benefits.

 

3. Improves Employee Satisfaction

Helping employees maintain their health can improve attitudes, overall health, and even productivity.

 

4. Creates Sense of Community and Belonging

For many employees, especially Millennials and younger, they seek more than a paycheck from their jobs. They want to be a part of something bigger, and working for a caring, responsible employer is critical. Offering group health benefits can help to fill that need.


5. Contributions Are Tax Deductible

Employer contributions to a health care benefits package are tax deductible. This can reduce taxes for employers offering benefits, helping to offset costs.

Additional Benefits for Part-Time Employees in California

In addition to health insurance, part-time employees may be eligible for other benefits, which can include:

  • Dental and Vision Insurance: Coverage for dental and vision care, which can be crucial for overall employee health.
  • Retirement Plans: Access to retirement savings plans such as 401(k)s.
  • Paid Time Off: Some employers offer vacation, sick leave, or paid time off to part-time employees.

Compliance and Strategic Recommendations

Employers should ensure compliance with both federal and state regulations regarding health insurance for part-time employees. Offering health insurance can help retain employees and avoid potential penalties. Consulting with a benefits advisor can provide clarity and help navigate these regulations effectively.

Offering Health Insurance May Be Easier Than You Think


Offering a health care benefits program at your company may be easier and more affordable than you believe. Rather than attempting to manipulate employee full-time and part-time rosters to avoid offering it, many companies are finding it easier to embrace providing health care for employees.


This is particularly true when you have the assistance of an employee benefits specialist like AEIS. We are a California-based company with experience in helping small and mid-sized companies not only get into and stay within government mandates, but also help them maximize their ROI.


Getting the maximum value from your company's health care and employee benefits programs does not always have to just be about compliance or even about spending as little as possible. Your benefits program should always add value. At AEIS, we can help you with this.


While compliance issues are critical in managing your health care and employee benefits programs, there is more at stake; you need to make your company as attractive as possible so that you can recruit and retain talented workers. Now may be just the perfect time to do just that.


The ever changing health care laws can be hard to keep up with. Don't wait to discuss your company, your options, and how health care benefits can help take your company to the next level, contact AEIS today. At AEIS, insurance is just the beginning. While health care insurance can be complex, we make it simple for you.


If you have questions about your status under the recent changes in the California health care laws, we encourage you to contact us.


Disclaimer: Any information related to compliance, laws and regulations, or other subject matters in this blog is intended to be informational and does not constitute legal advice regarding any specific situation. The content of this blog is based on the most up-to-date information that was available on the date it was published and could be subject to change. Should you require further assistance or legal advice, please consult a licensed attorney.

About The Author:


Ronald L. Bland

President


Ron, a top insurance professional in the Bay Area since 1985, excels in creating cost-effective, comprehensive plans for business owners. His achievements include top-of-the-table status in the Million Dollar Round Table and speaking at the 2021 Top of the Table Conference. A Bay Area native, Ron graduated with honors from San Francisco State University and lives in San Mateo with his wife, Elaina, and their two children.

Ron's Bio
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