Employer Mandate

Much has been made of the "Employer Mandate" in the Affordable Care Act, but few details have been available for employers to see.  In a nut shell, and leaving out many of the individual nuances, the Mandate goes as follows:

1. Starts January 1, 2014
2. Pertains to Employer with over 50 or more Full-Time Equivalent Employees (How an employer figures out what "equivalent" means is best left up to your tax advisers and accountants - there is a complicated formula to follow and many different rules to be sure you are considering.)
3. Employers with over 50 Employees must offer plans that meet the minimum essential coverage rule.
4. Employers with over 50 Employees must be sure that the cost of these plans does not  exceed 9.5% of what the lowest wage earners earn in a year.

What happens if an employer with over 50 employees does not offer minimal essential benefits at an affordable price?  Well it depends.  If no employee elects to get coverage through the exchange and receive premium tax credit than no penalty will be accessed on the employer.  But if an employee joins the exchange and gets premium assistance the penalty can be either $2,000 or $3,000 per employee of that company.  There are nuances to these rules and we will address these nuances in future blogs.

The burden of these new rules fall squarely on the employer, but know that the carriers are doing their best to educate their clients.  Your broker should be keeping up on these rules as well.  If you do not have a working relationship with your broker you need to get one.

Lisa Boyajian and Angela Gambino work with all the major carriers (Aetna, Anthem B.C., Blue Shield, Cigna, HealthNet, Kaiser, United Health, CalChoice and SeaChange).  If you would like to get more information or reach us you can call us at (714)680-5900 or find us on the web at www.ansainsuranceservices.com .