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Employer Mandate

Employer Mandate to Be Based on 2013 Numbers


Beginning January 1, 2014, the employer mandate provision of the Patient Protection and Affordable Care Act (PPACA) will become effective. This provision requires employers with 50 or more full-time equivalent employees to offer those employees health insurance benefits that satisfy certain affordability thresholds. Many employers do not realize that the application of the employer mandate will be based on the number of employees on the books in 2013.

According to guidance issued on December 28, 2012, the government will rely on an employer’s 2013 data to determine whether the employer is subject to a penalty for failure to comply with the requirement. Under the proposed regulation, if a company has 50 or more full-time equivalent employees on the record, that employer must provide those employees with insurance that meets affordability and minimum value requirements.

The guidance provides some clarification on how to determine the size of the firm. For example, employers can choose to calculate the number of full-time equivalent employees by averaging all 12 months of 2013, or by using a consecutive six-month period within the year.

A tax/penalty will apply if:

1) An employer is subject to the threshold and either does not provide any coverage.

OR

2) The employer provides insurance that does not meet affordability or minimum value thresholds, and one or more employees receives a premium subsidy for coverage obtained via a state health benefits Exchange.

This guidance should spur employers to make decisions as to the composition of their work force now. Employers must take a proactive approach to remain compliant with PPACA and its various provisions.

Please refer to the BenefitMall whitepaper on employer requirements and tax implications of PPACA for additional information on the employer mandate.

Please visit www.healthcareexchange.com for blog posts, polls, surveys and numerous resources, or www.benefitmall.com to view previous legislative alerts.

Reprinted from HealthcareExchange.com with permission.

About the Author:

Michael C. Gomes, Executive Vice President, BenefitMall
A veteran of the insurance industry, Mr. Gomes brings nearly 30 years of experience in planning, developing and executing national sales initiatives. As Executive Vice President of BenefitMall, Mr. Gomes has taken an active role in educating brokers and employers on the implications of PPACA. Having previously headed the Life and Health Divisions for the New Jersey Department of Insurance, Michael brings a unique perspective on Public and Private Partnerships associated with health care reform. Additionally, he has championed BenefitMall’s legislative agenda by leading numerous training, public speeches and court testimonies associated with health care reform and implementation of public exchanges.

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