BACKGROUND
Employers with at least 50 full-time employees (30 hours per week) are required to offer affordable minimum essential health coverage (see Essential Health Benefits InfoBrief ) that satisfies the individual mandate or pay a penalty.
“Affordable” means that an employee’s contribution can’t exceed 9.86% of household income in 2018 and that the employer must pay at least 60% of the plan’s total costs.
SCOPE
• Seasonal employees (working 120 days or less) aren’t counted as part of a full-time workforce.
• Part-time employees are counted by adding up their hours worked per month and then dividing by 120. That number is then added to the number of full-time employees.
• New businesses will determine their size on a reasonable expectation for the number of employees expected to be employed in the calendar year in question.
• Employers will be required to report to the federal government the health coverage they provide.
• Employers must provide employees written notice about exchange information and whether the employee may be eligible for credits.
STATUS
• If an employer doesn’t offer coverage and one or more full-time employees receive a government subsidy for health coverage, the penalty is $2,700 per year per full-time worker in 2021. (When calculating the penalty, the first 30 full-time employees are excluded.)
• If an employer does offer coverage and one (or more) full-time employees receive a premium subsidy, the penalty is the lesser of $4,060 per employee receiving the premium subsidy in 2021
or $2,700 for all full-time employees less the first 30.