What in-house counsel should know from the basics of the ACA’s employer mandate
Time will tell the extent to which such protections will remain and how the employer mandate will reshape the landscape of employer-sponsored health insurance.
March 26, 2014 at 04:00 AM
4 minute read
The original version of this story was published on Law.com
One of the more controversial aspects of the Patient Protection and Affordable Care Act (ACA) is the employer mandate, which applies to “large” employers with 50 or more full-time employees. The impact that the employer mandate will have on employer-sponsored health insurance plans, many of which are governed by the Employee Retirement Income Security Act (ERISA), will remain unknown for some time — predominantly due to the delay in its implementation. But whatever effect the employer mandate will have, it will likely arise out of its penalty provisions.
The employer mandate was originally scheduled to go into effect this year, but in 2013, the Obama administration announced a one-year delay to 2015. More recently, the Treasury Department announced a further delay to 2016 (at least for the imposition of penalties) for smaller businesses with 50 to 99 employees.
There are two types of penalties under the employer mandate for “large” employers who fail to offer their employees the opportunity to enroll in “minimum essential coverage.” First, if an employer fails to offer its full-time employees any health insurance coverage and at least one employee enrolls in health insurance through a public exchange, the employer's penalty is equal to $2,000 times the number of full-time employees beyond 30. So, for example, if a company with 130 full-time employees failed to offer its employees the opportunity to enroll in “minimum essential coverage,” the employer's penalty would be $200,000.
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