With the provisions of the Health Care Law that have gone into effect over the past few years, most employers are noticing the changes. Not the least of these changes are penalties which many be incurred by those employers who neglect to follow the law. A situation described by some as “pay or play”, employers may be penalized for things such as not providing employees with health care coverage, the right level of coverage, or coverage considered to be affordable. Large group employers, or those with 50 or more full-time equivalent employees, are likely to feel the brunt of the Health Care Law’s effects.
What types of penalties may be imposed upon large group employers with 50 or more full-time equivalent employees?
- The Mandate Penalty may be imposed upon employers not offering group health coverage. The Mandate Penalty is calculated on all full-time employees save the first 30, and amounts to $2,000.
- The Qualification Penalty may be imposed if employers do not offer a minimum and affordable qualifying plan to employees.
How can large group employers avoid incurring penalties?
Employers can avoid the inconvenience of Health Care Law penalties by meeting these requirements:
- The minimum value of employers’ contribution to health plan premiums must be 60 percent of the total cost.
- If Essential Health Benefits are offered, employers may not impose any annual or lifetime maximums.
- Annual out-of-pocket maximums paid by employees may not exceed the health savings account/high deductible health plan qualified limits
- Health coverage must be offered to all full-time employees working 30 or more weekly hours, as well as the dependent children of those employees.
- The health benefits offered by employers must be considered affordable. A premium exceeding 9.5 percent of an employee’s W-2 wages is considered to be unaffordable for that employee.
($6,350 per individual and $12,700 per family).
For more information regarding the Health Care Law and health care coverage requirements for large group employers, visit Insurance Hub’s website at www.insurancehubusa.com.