Who Must Offer Health Insurance? 
Employers are encouraged but not required to offer health insurance to employees . The federal government uses a carrot and stick approach to encourage employers to offer health insurance . The carrot comes in the form of premium tax deductions , payroll tax saving on employee contributions , and tax credits to small businesses . The Affordable Care Act uses the stick . There are penalties that employers of certain sizes may have to pay if they do not offer an affordable option -LRB- 9.5 % of family income -RRB- , or if employees purchase subsidized plans in the individual market . 