Affordable Health Coverage Mandated for Large Employers

If a company has at least 100 full-time employees as well as full-time-equivalent employees, effective January 1, 2015, the company must offer affordable health coverage that provides minimum value to at least 95% of full-time employees and their dependents or the company may be subject to an employer shared responsibility payment.

Certain seasonal employees are excluded from the count, although employees are considered full-time if they work 30 or more hours per week.  In order to determine if the employer has reached the 100 full-time employee threshold, part-time employee hours for a month are totaled and divided by 120, and the result is added to the full-time count.  Each year, employers must average their number of employees across the months of the year to see whether they will be an applicable large employer for the next year. This averaging can take into account fluctuations that many employers may experience in their work force across the year.

Affordable health care coverage is minimum essential coverage where the employee’s share of the cost is no more than 9.5% of the employee’s household income.

Employers with 50 or more full-time employees are also subject to the shared responsibility payment (penalty), but not until 2016, and again only if one or more full-time employees claim a premium tax credit.

The rules are extremely complex and the above information is presented in an abbreviated context.  However, if you are unsure whether or not your company is subject to the penalty for 2015, which can be substantial and higher than the cost of the insurance, please give us a call at 407-363-0890.