Employers must offer health insurance that is affordable and provides minimum value to their full-time employees and their children up to age 26 or be subject to penalties. This is known as the employer mandate. It applies to employers with 50 or more full-time employees, or full-time equivalents, and will be phased in during 2015 and 2016 based on employer size.
Employers with 100 or more full-time employees and full-time equivalents and employers with 50-99 full-time employees and full-time equivalents who do not qualify for transition relief will need to comply in 2015.
Employers with 50-99 full-time employees and full-time equivalents who qualify for transition relief may be able to delay implementation until January 1, 2016, or in some cases the first day of their plan year in 2016.
A penalty would generally apply if an employee applied for coverage in the Individual Marketplace and was deemed eligible for a subsidy either because the employee did not receive an offer of minimum essential coverage or the coverage the employer offered did not meet minimum value or affordability requirements.
For plan years beginning in 2015, employers with 100 or more full-time employees must offer affordable/minimum value medical coverage to 70% of their full-time employees and their dependents to age 26. Employers must treat all employees who average 30 hours a week as full-time employees. Employers who fail to meet the employer mandate will pay a penalty of $2,000 per full-time employee minus the first 80. Some employers will need to expand coverage in 2015 to meet the 70% requirement while others won’t.
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Many employers are unaware of the A.C.A rules. Some encourage their employees to go to the marketplace without foreseeing the consequences. If an employer offers health insurance, then the only way employees can go to the marketplace (Obamacare) and receive subsidies is if and only if the group insurance offered is not affordable (premiums paid represents more than 9.5% of the employees household income). The employer should also offer a Bronze plan (Minimum value- actuarial value 60%) to fully comply with the law.
If the employee is offered group health that is “affordable” and provides minimum value and still, he or she goes to the marketplace to receive subsidies, then a “claw back” while filing their taxes next year might be eminent.
You couldn’t be more certain! It is our duty to inform employers so they can make better decisions. Thanks for your input!
FTE count or full time equivalent employee count is very critical to determine the size of the group. Nevertheless, although part timers count in this calculation, they don’t qualify for benefits!
They count but they don’t qualify? What a contradiction!
The good thing is that part timers can go to the marketplace (obamacare) with no restrictions because they don’t qualify for group health!
You’re absolutely right! However, there are companies who care for their part timers and are offering health insurance. We posted an article on this subject in our Facebook page.