Starting in 2015, the Patient Protection and Affordable Care Act (PPACA) requires Americans to have “minimum essential coverage” or pay a tax penalty. This could include health insurance purchased inside or outside of a health insurance exchange; coverage under a government sponsored program, such as Medicaid; or an employer-sponsored plan or group plan.
To ensure that employers provide employer-sponsored health coverage, PPACA includes a “shared responsibility” provision. While this provision does not explicitly mandate that employers offer employees health insurance, it does impose penalties on “large” employers if their full-time employees obtain premium subsidies through the newly established exchanges. According to the Congressional Budget Office, employers are projected to pay $130 billion in penalty payments over the first ten years of PPACA.
Penalty for Not Providing Insurance
A large employer, defined as one having 50 or more full-time equivalent employees, must generally pay a penalty if at least one full-time employee receives subsidized coverage under an exchange. When an employee must find their own coverage because the company offers none, the penalty is $2,000 for each full-time employee in the company, but with a 30-employee deduction. When the employer does offer coverage but an employee turns it down because it is unaffordable (defined by the law as costing more than 9.5 percent of the employee’s household income), the penalty is $3,000 for every employee who buys insurance on the exchange and receives a subsidy. This affordability penalty is capped at the total penalty the company would pay if it did not offer insurance at all.
To assist employers in their efforts to fully understand and comply with the important provisions of health care reform, MSEC has developed the Health Care Reform Assessment. The assessment provides your organization the blueprint it needs to comply with the many and ever-changing requirements of PPACA. This customized assessment analyzes the specific impact health care reform will have on your organization and provides a checklist with “action steps” for implementing the necessary changes to ensure compliance.
a flat fee of $525, to get you ready for compliance in 2015.