Small employers, typically defined as businesses with fewer than 50 full-time equivalent (FTE) employees, are generally not required to purchase health coverage for their employees. The employer mandate applies to larger employers, and these companies sometimes purchase “MEC plans,” sometimes referred to as “skinny plans” because they cover only the…
Employer Mandate
The Employer Mandate under the Affordable Care Act (ACA) requires larger employers (generally those with 50 or more full-time equivalent employees, or FTEs) to provide health insurance to their full-time employees and dependents. For small businesses, this mandate generally does not apply unless they are under common ownership that collectively meets the 50 FTE threshold.
Can employers offer different levels of coverage to different employees under the Employer Mandate?
Employers can offer different levels of coverage to different categories of employees, but they must ensure that the coverage meets the minimum value and affordability standards set by the ACA. However, any distinctions in the benefits offered must not be discriminatory. For example, an employer could offer different health plans…
How is affordability of health coverage determined under the Employer Mandate?
Under the Employer Mandate, the affordability of health coverage is determined based on the employee’s share of the premium for self-only coverage. It should not exceed a set percentage of the employee’s household income. If an employer’s health plan fails to meet this affordability threshold, they may be subject to…
What are the penalties for non-compliance with the Employer Mandate?
If an employer subject to the Employer Mandate does not offer health insurance coverage, and at least one full-time employee receives a premium tax credit through the Health Insurance Marketplace, the employer may face a penalty. This penalty is often referred to as the “employer shared responsibility payment.” The amount…
Who is considered a full-time employee under the Employer Mandate?
Under the Employer Mandate, a full-time employee is defined as someone who works an average of at least 30 hours per week, or 130 hours per month. The calculation of full-time employees includes full-time equivalent employees, which are determined by combining the hours of part-time employees. This is important for…
What is the Employer Mandate or Employer Shared Responsibility requirment?
The Employer Mandate, part of the Affordable Care Act (ACA), requires certain employers to offer health insurance coverage to their full-time employees and their dependents, or potentially face a penalty. This mandate applies to employers with 50 or more full-time equivalent employees. The coverage offered must meet minimum value standards…
What is an MEC plan?
MEC stands for “Minimum Essential Coverage.” Any employer-sponsored group health insurance plan provides minmum essential coverage, but normally when people mention MEC plans, they are referring to skinny plans that applicable large employers (ALEs) can offer to avoid the across-the-board penalty under section the employer mandate (the 4980H (a) penalty)….