January 1, 2015 – Large Employers With More Than 100 FTEs Must Meet Mandated Regulations Or Pay Penalties

Posted by Donna Craig in Jan, 2015

As of January 1, 2015, large employers with more than 100 full-time equivalent (FTE) employees must provide affordable health insurance to at least 70 percent of their full time employees or pay penalty fines, which are not deductible as business expenses.  Full time employees are those employees working an equivalent of 30 hours per week.  According to current reports, Republican legislators will seek to change the definition of “full time employee” to mean employees working 40 hours per week, not 30 hours per week.

While most large employers have compliant insurance plans in place, transition rules will assist employers in becoming compliant with the Affordable Care Act.  These include:

• If insurance plans’ years start on other than January 1, employers will be able to begin compliance with the mandate at the start of their plan years in 2015.
• Meeting dependent insurance coverage requirements in 2015, employers must take steps during 2014 or 2015 plan year (or both) to extend coverage to these dependents.
• The assessable penalty payment for not offering insurance coverage will, in any calendar month, be capped at the number of the employer’s FTEs for the month (excluding the first 80 employees) multiplied by 1/12 of $2,000. This cap ensures that the payment for an employer that offers coverage can never exceed the penalty payment the employer would owe if it did not offer coverage.
• The penalty for not offering affordable insurance coverage, where at least one FTE receives a premium tax credit is calculated by the number of FTEs who receive a premium tax credit for the month, multiplied by 1/12 of $3,000.