If you are a business owner and qualify as a “large employer” — any company with 50 or more full-time or full-time equivalent employees (employees who average 30 hours per week) — there a few things you need to know regarding employee coverage. If you don’t comply with the regulations set for you, you will face significant penalties, which can quickly add up.
ALE employers must offer affordable or minimum value medical coverage to their full-time employees and their dependents until the age of 26. This minimum essential coverage includes various programs that comply with ACA’s provisions to employer health care.
Any employer who does not offer minimum essential coverage to at least 95% of their full-time employees and their dependents is subject to penalty, and at least one employee obtains coverage through the Marketplace Exchange. This penalty includes a $2,320 fine per full-time employee after the first 30 employees. If you have 150 employees, this penalty would be $308,400.
If employers offer coverage, but the coverage is not affordable or does not meet a minimum value, they may still receive a penalty. If your employee’s share of the premium for the coverage you provide is more than 9.78% of their household income, the coverage is deemed unaffordable.
The penalty includes either a $3,480 fine per full-time employee receiving a federal subsidy for coverage purchased on the Marketplace or a $2,320 per full-time employee, not including the first 30, depending on which is the lower cost for the company.
As you can see, these penalties can add up to a lot of expenses for your business. At SBMA, we want to help you avoid any potential penalties for lack of proper insurance. Contact us for more information regarding your employer benefit needs.