Penalty Definition

Penalties go into effect in 2015 for large group employers who either do not offer coverage to substantially all full-time employees, or offer coverage that is unaffordable. There is transition relief for certain employers with fewer than 100 FTE employees. The fines listed below will increase each year.

General Penalty Criteria1:
  • Large group - employer has at least 50 full-time equivalent employees
  • One or more eligible employees purchased subsidized coverage through the marketplace
Employer Does Not Offer Coverage: Employer Offers Unaffordable Coverage:
  • Employer is penalized on all employees excluding the first 30 full time employees
    (30+ hours/week)
  • Employer is penalized if employees' premium contributions exceed 9.5% of wages2 and/or the plan covers less than 60% of health care expenses
Penalty for No Coverage: Penalty for Unaffordable Coverage:
$2,000 (per full-time employee) $3,000 (per full-time employee obtaining subsidies)
 
1) If standards are not met, the employee may be eligible for subsidies and the employer may pay a $3,000 penalty per employee receiving marketplace subsidies
2) In 2015, $47,080 for an individual and $97,000 for a family of four (source: http://aspe.hhs.gov/poverty/15poverty.cfm)

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