Understanding the Employer Mandate: What Will Happen to Existing Plans in 2015?

What is the Employer Mandate?

The employer mandate, also known as the “play or pay” provision, is a key component of the Affordable Care Act (ACA). It requires large employers (those with 50 or more full-time equivalent employees) to provide health insurance coverage to their employees and their dependents, or pay a penalty. The mandate was originally set to take effect in 2014, but was delayed until 2015.

Will Existing Employer Plans Be Terminated in 2015?

The short answer is: some but not all. The ACA requires all health insurance plans to meet certain minimum essential health benefits (EHBs), including coverage for preventive care, maternity care, and prescription drugs. Existing employer plans that do not meet these requirements will be phased out over a period of time, and employers will need to offer plans that do meet the requirements.

However, employer plans that were in place on or before March 23, 2010, and have not undergone any major changes since then, are considered “grandfathered” and are exempt from the ACA’s coverage requirements. These plans can continue to be offered, even if they do not meet the EHBs.

What if My Employer’s Plan Does Not Meet the ACA Requirements?

If your employer’s plan does not meet the ACA requirements, you have a few options. You can:

Enroll in a plan offered by your employer that does meet the requirements.
Shop for a plan on the Health Insurance Marketplace (also known as the “exchange”).
Enroll in a Medicaid or CHIP program.

If you choose to enroll in a plan on the Health Insurance Marketplace, you may be eligible for a premium tax credit or cost-sharing reduction to help make coverage more affordable.

What if I Lose Coverage Under My Employer’s Plan?

If you lose coverage under your employer’s plan, you have a few options as well. You can:

Enroll in a plan on the Health Insurance Marketplace.
Enroll in a Medicaid or CHIP program.
Purchase a plan directly from an insurance company.

If you choose to purchase a plan directly from an insurance company, you will not be eligible for a premium tax credit or cost-sharing reduction.

What are the Penalties for Not Having Health Insurance?

If you do not have health insurance, you may have to pay a penalty when you file your taxes. The penalty is based on your income and the number of months you were uninsured. For 2023, the penalty is $695 per adult and $347.50 per child (up to a maximum of $2,085 per family). The penalty will increase in future years.

Conclusion

The employer mandate is a complex issue with many different implications. If you are an employer, you should talk to your insurance provider and a licensed agent to find out how the mandate will affect your business. If you are an employee, you should talk to your employer and a licensed agent to find out what your options are for health insurance coverage.