ACA Employer Mandate: What Employers Need to Know

Many employers are familiar with the Affordable Care Act’s (ACA) requirement that employers with 50 or more full-time employees provide health insurance to their employees. However, there is another important aspect of the ACA that employers need to be aware of: the employer mandate.

The Employer Mandate

The employer mandate is a provision of the ACA that requires certain employers to pay a penalty if they do not offer health insurance to their employees. The penalty is calculated based on the number of full-time employees who are not offered health insurance and the number of months that they are not offered insurance. It is based on the number of full-time equivalent employees and it is calculated per employee per month that lack health insurance.

For 2023, the penalty is $2,750 per full-time employee (plus $350 for each additional family member). This means that an employer with 50 full-time employees who does not offer health insurance could face a penalty of up to $137,500 for the year. The penalty increases to $4,000 per full-time equivalent employee per year for companies with 50 to 99 employees, beginning with the 51st employee that doesn’t have coverage.

Who is Subject to the Employer Mandate?

The employer mandate applies to employers with 50 or more full-time employees. Full-time employees are defined as employees who work at least 30 hours per week. Employers can also be penalized for having part-time employees who have full-time equivalent status which equals 30 hours or more per week, even if they aren’t scheduled for 30 hours. Employers can also combine part-time hours worked by multiple part-timers to constitute full-time employment for the purpose of calculating the employer mandate.

Penalties for Non-Compliance

Employers who do not comply with the employer mandate may be subject to penalties. The penalty is calculated based on the number of full-time employees who are not offered health insurance and the number of months that they are not offered insurance.

The penalty for non-compliance is $2,750 per full-time employee (plus $350 for each additional family member). This means that an employer with 50 full-time employees who does not offer health insurance could face a penalty of up to $137,500 for the year.

How to Avoid the Employer Mandate Penalty

There are several ways that employers can avoid the employer mandate penalty. One way is to offer health insurance to all of their full-time employees. Another way is to pay the penalty. However, this is not a good option for most employers, as the penalty can be very expensive.

The best way to avoid the employer mandate penalty is to offer health insurance to all of your full-time employees. This will help you to keep your employees healthy and productive, and it will also save you money in the long run.

Conclusion

The employer mandate is an important provision of the ACA. Employers who do not comply with the employer mandate may be subject to penalties. The best way to avoid the employer mandate penalty is to offer health insurance to all of your full-time employees.