What Are Some of the Employee Benefits That Are Required by Law?

There are many different types of benefits that employers may offer to their employees, some of which may be legally mandated and others of which may be offered on a voluntary basis. The purpose of this article is to briefly summarize, in a non-exhaustive and summary fashion, some of the more common employee benefits that an employer may be legally required to offer its employees. This article is for general information purposes only and does not purport to be, and should not be taken as, a complete or comprehensive list or discussion of all benefits that may be legally required of any employer in any particular jurisdiction or under any particular circumstances.   

Health Insurance

Under the federal Affordable Care Act’s (“ACA”) employer shared responsibility provisions, certain employers (known as “Applicable Large Employers”) must either offer healthcare coverage that meets certain minimum standards to its full-time employees and their dependents, and/or to potentially make an employer shared responsibility payment to the IRS. Generally, a company is considered an Applicable Large Employer if it had an average of at least 50 full-time (or full-time equivalent) employees during the preceding calendar year. Although companies that do not qualify as an Applicable Large Employer may not be required to provide healthcare coverage, many choose to do so as a way of attracting and retaining talent. For more information on the Affordable Care Act, you can visit: https://www.healthcare.gov/glossary/affordable-care-act/

Workers’ Compensation Insurance

Workers’ Compensation (often referred to as Workers’ Comp) provides certain benefits to employees who have sustained a job-related injury or illness. The benefits can include income replacement for lost wages, payments for medical and rehabilitation expenses, and the like. Every state has its own individual workers’ compensation laws, and while those laws may vary from one state to the next, the vast majority of employers are required to obtain workers’ compensation coverage for their employees. There can be severe consequences for failing to comply with state workers’ compensation requirements, and employers should verify that they are compliant with all applicable workers’ compensation laws.

Disability Benefits (Required in Certain States)

There are some states that require employers to provide disability insurance. While the specific disability benefits may vary depending on a variety of factors (including without limitation any applicable state requirements, the type of disability policy, and the policy’s terms, conditions, exclusions, and limitations), generally speaking disability insurance provides partial income replacement to employees who have to miss work due to certain qualifying injuries, illnesses, or conditions.

Medicare & Social Security Contributions

Medicare & Social Security are both federally mandated programs that cover the vast majority of employees. Social Security provides income for eligible retired workers and their eligible dependents, as well as for eligible disabled workers and their families. Medicare provides health insurance coverage for eligible workers and retirees, as well as individuals with certain qualifying conditions or disabilities. Both Social Security and Medicare are funded through mandatory payroll taxes, with a portion of the tax being paid by the employer and a portion by the employee.

Federal Family and Medical Leave

The federal Family and Medical Leave Act (“FMLA”) is a law that requires covered employers to provide eligible employees with a certain amount of unpaid, job-protected leave for certain qualifying family and medical reasons. In the private sector, an employer is generally covered by the FMLA if it has 50 or more employees in 20 or more workweeks in the current or preceding calendar year. The law sets forth certain eligibility criteria that employees of covered employers must satisfy in order to be entitled to the leave, and the purpose of the leave must be for one or more qualifying reasons.

Unemployment Insurance

Unemployment insurance provides partial income replacement benefits to eligible employees who have lost their job (or in some instances have had their hours reduced) for certain qualifying reasons. The funding for unemployment insurance benefits comes from tax payments that employers make to the federal and applicable state governments. Each state has their own unemployment compensation system, and while the laws may vary from state to state, the majority of employers are required to contribute to federal and state unemployment taxes. 

With so many businesses looking to attract and retain potential employees, it is important to show that your business is invested in them, their health, and their future. For more information on Employee Benefits and how Cross Insurance can help you contact your local office.



Please note that the applicability and specific requirements of employment-related laws (including without limitation laws related to required benefits) may be highly dependent on a wide variety of factors. Employers must consider federal requirements as well as the requirements of the particular state or states in which they operate. A particular benefit that may not be required under federal law may be required under applicable state law, and vice versa. Further, state law requirements can and often do vary from state-to-state. The applicability of some laws (federal or state) may depend on variables, including (without limitation) the number of employees employed by an employer. The benefits described in this article are by no means an exhaustive list of all benefits that may be required under federal or state law, nor is this article meant to fully describe or explain any particular type of benefit. This article is for general information purposes only and is not to be relied upon or used for any particular purpose. Cross Insurance shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained in this article. This information contained in this article is not intended to constitute and should not be considered legal, insurance, accounting, or other professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. Employers should consult legal counsel to determine applicable legal requirements. The views expressed in this article are that of its author and do not necessarily represent the views of Cross Financial Corp. and its subsidiaries or affiliates (“Cross Insurance”) or Cross Insurance’s management or shareholders.

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