Health Care Reform—
Employer Mandate Basics
WHICH organizations are required to offer coverage?
Applicable large employers
Employers with 50 or more full-time equivalent (FTE) employees must offer coverage to full-time employees and their dependants. To determine your FTE count, you need to add hours worked by your part-time employees. The employer mandate became effective January 1, 2015 although there is transition relief for certain employers with fewer than 100 FTE employees.
WHAT must I do to avoid the penalty?
Offer affordable coverage that provides minimum value.
Coverage is considered affordable if
- The employee's portion of the premium for individual coverage doesn't exceed 9.5% of his or her income; and,
- The plan must pay, on average, at least 60% of the costs of covered services.
WHO do I need to cover?
Full-time employees working 30 hours or more a week, averaged over the course of a month.
WHAT will happen if I don't?
You may have to pay a penalty, which will vary based on whether you offer coverage or not.
If your employee receives government assistance to buy health insurance, it will trigger a penalty for your organization.
Under the law, employees that do not have access to affordable employer-sponsored coverage that provides the minimum value are eligible for financial assistance from the federal government in the form of a premium tax credit, to purchase coverage in the Health Insurance Marketplace.
This financial assistance may be available to employees with income between 100% and 400% of the federal poverty level (FPL), depending on family status (for example: a household income of $97,000 for a family of four in 2015 = 400% FPL). The penalty amount assessed to the employer will vary based on whether the employer fails to offer any health care coverage at all to full-time employees or offers coverage that is not affordable and/or does not provide the minimum value required.
NOTE: Information BCBSND shares about health care reform is not intended to be legal advice. Please consult your legal and tax advisors as you make decisions about how to approach health care reform.