It’s the start of the New Year, which means the Affordable Care Act (ACA) employer mandate, delayed from its original date, went into effect as of January 1, 2015. The mandate states that small business owners with 100 or more full-time equivalent employees must be in compliance with ACA employer requirements, or else face penalties.
Here are 6 key points of the ACA’s employer mandate for small business owners:
- Small businesses with 100 or more full-time equivalent employees (FTEs) need to offer health benefits to at least 70% of their FTEs.
- The cost of an employer’s health plan must be deemed affordable by law, meaning the cost of the plan cannot exceed more than 9.5% of an employee’s annual salary.
- Failure to comply with the employer mandate will result in an annual fee of $2,000 per employee, with the first 30 full-time employees being exempt.
- Employers must be able to prove that the health insurance plan was offered to at least 70% of the workforce, and that the plan is considered affordable by law.
- For each employee that opts to purchase individual coverage through the exchange, and if the employer’s plan is deemed unaffordable, it will result in a $3,000 penalty for each employee that receives a subsidy.
- Employers with 50 to 90 FTEs will have until 2016 to comply with the employer mandate. Employers with fewer than 50 employees are exempt from the law and will not face a penalty.
If you have questions or concerns about the Affordable Care Act’s employer mandate, please contact McGrath Insurance Group at 800-342-3859 and request to speak with our PPACA certified agent, Jennifer Krog, firstname.lastname@example.org.
*This article is written for informational purposes only and should not be construed as providing legal advice.