5 Questions Businesses Should Be Asking About Employer Shared Responsibility

Under the Affordable Care Act, employers have new responsibilities towards their employees to provide them with affordable health coverage. These Employer Shared Responsibilities have very specific guidelines – so here are 5 questions you should be asking.

How do I know if this applies to my company?

These regulations concern companies that are deemed to be large employers. This means companies employing 50 full-time employees or the equivalent in a combination of full and part-time employees are liable for Employer Shared Responsibilities and must offer affordable healthcare. If you employ fewer than 50 full-time, or equivalent, employees or already offer affordable health care, this does not apply to you.

How do I calculate whether I meet the employee threshold?

Full-time employees are considered as working a minimum 30 hours a week. Part-time employees are assumed to work half that, 15. If your employees, be it all full-time or a combination, work the equivalent hours of 50 full-time employee then you meet the threshold.

How is an employer to know that the coverage is affordable?

Affordable coverage is defined as being no more than 9.5% of an employee’s annual household income. If the employer does not know the annual household income, it must not be more than 9.5% of the annual wages paid to the employee.

What about companies close to the 50-employee threshold?

Employers can calculate their average number of employees over a six-consecutive-month period in the year and use this to determine whether or not they need to offer a health care plan. There is Transitional Relief available from an Employer Shared Responsibility payment in this case.

When is an employer liable for an Employer Shared Responsibility payment?

If an employer is found to be in breach of the Employer Shared Responsibility provisions set out by the Affordable Care Act, they are liable to make a payment. They are considered liable if they do not offer health care to their full-time employees, or the coverage offered is found to be unaffordable or not providing minimum value. If an employer is offering health care to most of their employees but one or more of their full-time employees receives a premium tax credit for enrolling in a government program, the employer is liable for a payment.

If you have more insurance questions, click here to contact an expert

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