BTerrell Group Blog

By now, you have surely heard about the employer mandate included within the Affordable Care Act (ACA), often referred to as “play or pay.” (Quick recap: Employers must offer “minimum essential health coverage” to full-time employees that is both “affordable” and offers “minimum value.”) But do you understand all of the implications on your small or midsize business? Does the mandate apply to you? How do you calculate full-time employees?  Do you factor in employees working for your company outside the United States? What if you make a mistake?

Here are a few startling details about the employer mandate that I’ve come across:

• If an employer subject to the mandate does not provide “minimum essential health coverage” to full-time employees and a full-time employee then obtains subsidized coverage on an exchange, the IRS may assess an annualized penalty equivalent to $2,000 multiplied by the total number of full-time employees in the workforce.
• If coverage offered is not considered “affordable,” then the IRS may assess an annualized penalty of $3,000 per eligible employee who seeks subsidized coverage under an exchange.