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. 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 is eligible for subsidies and the employer pays a $3,000 penalty per employee receiving marketplace subsidies
2) In 2013, $45,960 for an individual and $94,200 for a family of four (source: http://aspe.hhs.gov/poverty/13poverty.cfm)

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