Many employers have heard about the “employer mandate.” But they might not know what that means or what the penalties are for not complying.
What is the “employer mandate”?
Health care reform requires employers with 50 or more full-time employees to offer minimum essential health coverage to their employees. If they don’t, they must pay a penalty (a nondeductible, extra tax). They also may have to pay a penalty if any of their employees get government aid to lower their health coverage costs. Employers with fewer than 50 employees will not have to pay a penalty for dropping coverage. We’ll explain below how a full-time employee is defined.
When must employers start offering coverage?
Employers have until their renewal date or start of their plan year in 2014. For instance, if an employer’s plan starts on January 1, that employer must offer health coverage January 1, 2014. But if an employer’s plan starts on July 1, that employer has until July 1, 2014, to offer health coverage.