Group Health Employer Mandate (50 plus employees)

aca logo January 1, 2016 ObamaCare’s “employer mandate” is a requirement that all businesses with 50 or more full-time equivalent employees (FTA) provide health insurance to at least 95% of their full-time employees and dependents up to age 26, or pay a fee.

Is your company part of the “Employer Mandate” … To be subject to the Employer Shared Responsibility provisions for a calendar year, an employer must have employed during the previous calendar year at least 50 full-time employees or a combination of full-time and part-time employees that equals at least 50.  For example, an employer that employs 40 full-time employees (that is, employees employed 30 or more hours per week on average) and 20 employees employed 15 hours per week on average has the equivalent of 50 full-time employees, and would be an applicable large employer.

What’s the fine … If an employer owes the fee because they didn’t cover workers, it’s a flat $2,000 per full-time employee, excluding the first 30 employees.  If only a few end up with unaffordable coverage or if that coverage doesn’t meet minimum value standards, it’s $3,000 per full-time employee who received premium assistance through an exchange.  The fee is always per month, so it’s always 1/12 of those annual totals for each month.

Are all full-time employees counted, even if they are eligible for Medicare or covered under their spouses group health plan … Yes.

Are Companies with employees working outside the U.S. subject to the Employer Shared Responsibility provisions?  For purposes of determining whether an employer is an applicable large employer, an employer generally takes into account only work performed in the United States.  For example, if an employer has employees who are permanently living and working outside the U.S., they would not be counted towards the Employer Shared Responsibility.

Advice for Employees with Unaffordable Options .. If employer-sponsored coverage is unaffordable (costs more than 9.5% of employee-only income) or doesn’t provide minimum value, you may be eligible for marketplace subsides. If employer-sponsored health insurance (for self-only coverage for you or a family member) costs more than 8% of your household Modified Adjusted Gross Income, you may be exempt from the fee as well. You are not required to take the coverage that your employer offers.

  • The employer mandate is based on full-time equivalent employees, not just full-time employees.
  • Employers have to offer coverage to 95% of their full-time employees.
  • Coverage must be offered to dependents up to age 26.
  • Spouses do not count as dependents; coverage does not have to be offered to spouses.
  • Coverage to employees must be considered affordable and can’t cost more than 9.5% of employee household income.
  • Employers who don’t provide coverage the fee is; $2,000 per full-time employee or $3,000 per full-time employee who is receiving a subsidy through an exchange.
  • Employers must offer at least a 30 day “Special Enrollment Period” for employees or qualifying employee family members losing coverage from another source.

The employer mandate is starting for all employers with more than 50 full-time employees on January 1, 2016.  Employers that employ fewer than 50 full-time employees (including full-time equivalents) in their businesses are not subject to the Employer Shared Responsibility provisions. The vast majority of businesses fall below this threshold.

What the Employer Reports to the IRS … All large group employers (ALE – Applicable Large Employer) must file a “Form 1095-C. Employer Provided Health Insurance Offer and Coverage, and Form 1094-C, the transmittal form. The ALE must also furnish a similar statement to each of its full-time employees.

Be sure you have all the appropriate info before January 1.  Some groups may be able to keep their current plan for the 2016 plan year.  If you have questions or would like more information, please contact me anytime.

John Conner

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Author: John

Medicare Options along with Individual and Group International Medical Insurance Options.