Which employee benefits do I have to pay for?

One of the most common misconceptions about employee benefits is that employers are legally required to pay a specific percentage of their employees' health insurance premiums.

In reality, the answer depends on the type of benefit, the size of your organization, and the requirements of your insurance carrier.

What does the law require?

Some employer-sponsored benefits and protections are legally mandated, although requirements vary by state and employer circumstances.

For example:

• Workers' compensation: Most states require qualifying employers to provide workers' compensation coverage.
• Unemployment insurance: Employers generally must contribute to state and federal unemployment insurance programs.
• Health insurance: Under the Affordable Care Act (ACA), applicable large employers—generally those with 50 or more full-time employees, including full-time equivalents—must offer qualifying, affordable coverage to eligible full-time employees and their dependents or potentially face employer shared responsibility penalties.

Smaller employers are generally not required under federal law to offer health insurance, although other laws and state-specific requirements may apply.

Importantly, the ACA does not establish a universal percentage of premiums that every employer must contribute. Affordability is determined using specific regulatory standards rather than a single fixed contribution percentage.

What do insurance carriers require?

Even when an employer isn't legally required to offer health insurance, carriers may establish minimum contribution and participation requirements as conditions of providing coverage.

For example, many fully insured small-group carriers in North Carolina commonly use requirements such as:

• Employer contribution: A minimum contribution toward employee-only coverage, often around 50%.
• Employee participation: A minimum percentage of eligible employees enrolling, with certain employees who have other qualifying coverage excluded from the calculation.

These requirements can vary by carrier, plan, group size, and applicable enrollment rules.

They are carrier eligibility requirements, not universal legal mandates.

Why do carriers establish these rules?

The primary reason is to reduce a problem known as adverse selection.

If only employees who expect significant healthcare expenses enroll in a health plan, while healthier employees decline coverage, the insurance pool may become more expensive and less predictable.

Minimum employer contributions help make coverage more affordable, encouraging broader enrollment. Participation requirements help carriers maintain a more balanced group of insured employees.

Together, these provisions help carriers manage risk and price coverage.

What about dental, vision, life, and disability insurance?

Most traditional ancillary benefits are not universally required by federal law.

Employers often choose to offer dental, vision, life insurance, disability coverage, and other supplemental benefits because they support recruitment, retention, and employee financial well-being.

Some can be offered on a voluntary, employee-paid basis, while others may require employer contributions or minimum participation levels.

Certain benefits, including disability coverage and paid leave, may also be subject to specific state or local requirements.

What should employers consider?

We encourage employers to approach benefits decisions from two perspectives:

First, what are you required to do?

Understand the applicable laws, carrier eligibility rules, and minimum contribution requirements.

Second, what makes sense for your organization and your employees?

Consider your budget, workforce needs, recruitment challenges, and long-term business priorities.

At MPOWR, we help employers understand both sides of that equation.

Compliance establishes the requirements you must satisfy. Your benefits strategy determines how you invest beyond those requirements to create meaningful value for your organization and your employees.