Offering Benefits to Part Time Employees

In today’s workforce, more companies are asking: Do part time employees get benefits? With the rise of flexible work arrangements and the need to attract and retain top talent, offering benefits-especially part-time employee health insurance-is no longer just a perk for full-time staff. It’s becoming a strategic advantage for businesses of all sizes, from fast-growing startups to established multi-regional firms.

This guide breaks down everything benefits brokers, HR leaders, and company executives need to know about offering health insurance for part time workers and other critical benefits, with a focus on compliance, cost-effectiveness, and employee satisfaction.

Why Offer Benefits to Part-Time Employees?

The traditional divide between full-time and part-time benefits is fading. Today’s employees, regardless of hours worked, value security, flexibility, and recognition. For employers, providing benefits to part-time staff can:

• Improve retention and reduce turnover costs
• Attract a broader, more diverse talent pool
• Boost morale and productivity
• Strengthen your employer brand in a competitive market

Many leading companies-including major retailers and financial institutions-are now offering health insurance for part time workers and other perks as part of their standard package.

Defining Part-Time Employment

Before setting your benefits policy, it’s essential to understand how “part-time” is defined:

• Affordable Care Act (ACA): Employees working less than 30 hours per week (or 130 hours per month) are considered part-time for health insurance purposes. For more details, see Integrity Data's ACA Guide.
• Bureau of Labor Statistics: Typically, part-time is under 35 hours per week, but employers can set their own definitions within legal guidelines.

Always document your definition in your employee handbook and apply it consistently to avoid compliance issues.

Legal Requirements: What Must You Offer?

Federal Law

• Health Insurance: The ACA requires employers with 50 or more full-time equivalent employees (FTEs) to offer health insurance to full-time employees, but not to part-time employees. However, you can choose to offer it to part-time staff. More on this can be found at Genesis HR Solutions.
• Retirement Plans: Under the Employee Retirement Income Security Act (ERISA), part-time employees who work at least 1,000 hours in a 12-month period must be eligible to participate in your retirement plan. The SECURE 2.0 Act further expands access for long-term, part-time employees to participate in employer-sponsored 401(k) and 403(b) retirement plans, reducing the eligibility wait from three years to two for those working at least 500 hours per year.
• Other Benefits: Statutory benefits like workers’ compensation, unemployment insurance, and (in some states) paid sick leave may apply to all employees, regardless of hours worked.

State and Local Laws

Some states and cities mandate paid sick leave, short-term disability, or even health insurance for part-time employees. Requirements vary, so always check local regulations.

Health Insurance for Part Time Workers: Options and Considerations

Are Part-Time Employees Eligible for Health Insurance?

Yes, if the employer chooses to offer it. Federal law does not require health insurance for part-time employees, but many companies provide it to remain competitive. If you offer coverage, you must do so consistently for all similarly situated part-time workers to avoid discrimination issues.

Setting Eligibility Criteria

Employers have flexibility in setting eligibility for part-time employee health insurance, but criteria should be:

• Clearly defined (e.g., minimum 20 hours per week, or after 90 days of employment)
• Documented in company policies
• Consistently applied to all part-time staff in similar roles

Insurance Carrier Requirements

Not all insurance carriers allow part-time employees on group plans. Many require a minimum number of hours (often 20 per week) and may have minimum participation rates for the plan to remain valid. Always check with your carrier or broker before finalizing your policy.

Health Reimbursement Arrangements (HRAs) and ICHRA

A popular, flexible solution for part-time employee health insurance is the Individual Coverage Health Reimbursement Arrangement (ICHRA). With ICHRA:

• Employers set a defined contribution for health expenses
• Employees purchase their own health insurance and get reimbursed tax-free
• Both full-time and part-time staff can participate, with customizable eligibility rules

Platforms like Venteur simplify ICHRA administration, making it easy for companies to offer tailored, compliant, and cost-effective health benefits to all employees, regardless of hours worked.

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Other Common Benefits for Part-Time Employees

While health insurance for part time workers is the most sought-after benefit, many companies also offer:

• Dental and vision insurance: Often bundled with health plans or offered as stand-alone options.
• Retirement plans: 401(k) or similar, with eligibility based on hours worked and tenure. The SECURE 2.0 Act now allows part-time employees working at least 500 hours per year for two consecutive years to participate in 401(k) plans.
• Paid time off: Vacation, sick leave, and personal days, sometimes prorated based on hours.
• Life and disability insurance: Group rates can make these affordable for part-time staff.
• Tuition reimbursement: Supports employee growth and loyalty.
• Other perks: Employee discounts, flexible schedules, wellness programs, and more.

Benefits of Offering Health Insurance to Part-Time Employees

For Employers

• Attract and retain top talent: Many skilled workers seek part-time roles for flexibility but still expect benefits.
• Boost engagement: Employees who feel valued are more productive and loyal.
• Reduce absenteeism: Access to health care can mean fewer sick days and a healthier workforce.
• Enhance diversity: Offering benefits widens your candidate pool, supporting DEI goals.

For Employees

• Financial security: Health insurance and retirement plans provide peace of mind.
• Work-life balance: Paid time off and flexible schedules support well-being.
• Career growth: Tuition assistance and other perks help employees build skills and advance.

How to Implement a Part-Time Benefits Program

1. Assess your workforce: Determine how many part-time employees you have and their average hours worked.
2. Review legal requirements: Check federal, state, and local laws for mandatory benefits.
3. Consult your insurance carrier or broker: Confirm eligibility and participation requirements for health insurance and other benefits.
4. Set clear eligibility criteria: Define minimum hours, tenure, or other requirements for each benefit.
5. Communicate your policy: Update your employee handbook and onboarding materials. Be transparent about what’s offered and who qualifies.
6. Choose the right platform: Consider solutions like Venteur to streamline benefits administration, ensure compliance, and provide expert support.

Addressing Common Employer Concerns

Cost Management

One of the biggest concerns for employers is the cost of extending benefits to part-time workers. However, platforms like Venteur and ICHRA solutions allow companies to set defined contributions, helping manage budgets while still providing valuable coverage. Employers can also design tiered benefits packages based on hours worked, ensuring sustainability and fairness.

Compliance and Consistency

Ensuring compliance with federal, state, and local laws is critical. The ACA defines part-time employees as those working less than 30 hours per week or 130 hours per month. For retirement plans, the SECURE 2.0 Act now requires eligibility for part-time employees who have worked at least 500 hours per year for two consecutive years. Documenting and applying eligibility criteria consistently helps avoid legal risks and supports a fair workplace.

Employee Communication

Clear communication is essential. Employees should understand:

• What benefits are available
• Who is eligible and how eligibility is determined
• How to enroll and use their benefits

Regular updates and easy-to-understand materials can boost participation and satisfaction.

Why Companies Choose Venteur for Part-Time Employee Benefits

Venteur stands out in the ICHRA market by making it simple for employers to offer health insurance for part time workers and full-time staff alike. Here’s why:

• User-friendly platform: Easy for HR teams and employees to navigate, reducing administrative headaches.
• Customization: Tailor benefit offerings to different employee groups, including part-timers.
• Expert support: Access to compliance guidance and hands-on help from benefits professionals.
• Cost-effectiveness: No setup fees or monthly minimums, helping businesses of all sizes control costs.
• Compliance: Ensures all plans meet federal and state requirements.
• Seamless integration: Works with your existing HR and payroll systems for smooth management.

With Venteur, companies can future-proof their benefits, attract top talent, and empower every worker-full-time or part-time-to perform their best.

Final Thoughts

Offering benefits to part-time employees is more than a trend-it’s a smart business decision. With the right strategy, tools, and support, you can provide part-time employee health insurance and other valuable perks that help your company thrive.

Venteur is here to help you navigate the complexities of modern benefits, ensuring every worker-no matter how many hours they work-has the protection and support they need to be their best.

Your companion in health for life.