While there is no employer mandate, beginning in 2014, a large employer (an employer that employed an average of at least 50 full-time employees during the preceding calendar year) who fails to offer its full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer-sponsored plan for any month is subject to a penalty if at least one of its full-time employees is certified to the employer as having enrolled in health insurance coverage purchased through a state exchange with respect to which a premium tax credit or cost-sharing reduction is allowed or paid to such employee or employees. The penalty for any month is an excise tax equal to the number of full-time employees over a 30-employee threshold during the applicable month (regardless of how many employees are receiving a premium tax credit or cost-sharing reduction) multiplied by one-twelfth of $2,000.
Large employers that offer coverage will be required to automatically enroll employees into the employer’s lowest cost premium plan if the employee does not sign up for coverage or does not opt out of coverage.
A large employer that does not offer coverage for all its full-time employees, offers a minimum essential coverage that is unaffordable, or offers minimum essential coverage that consists of a plan under which the plan’s share of the total allowed cost of benefits is less than 60 percent, is required to pay a penalty if any full-time employee is certified to the employer as having purchased health insurance through a state exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee.
Starting in 2011 (2010 Tax Year), small businesses (an employer who employs 25 or fewer qualified employees during the taxable year, and the average employee compensation does not exceed $50K) will be eligible for Health Care Affordability Tax Credits worth up to 35 percent of their contribution to their employees’ health insurance plans. In 2014, when Small Business Health Options Programs (SHOP) exchanges are established, tax credits will increase to 50 percent of employers’ contributions.
To qualify for the tax credit, businesses must cover at least 50 percent of employee premium costs. Tax-exempt employers would get a 25 percent credit against payroll taxes. Employers with 10 or fewer employees and average wages of less than $25K would get 100 percent of the credit.