One of the more controversial regulations included in the Affordable Care Act, the Employer Shared Responsibility, was initially postponed in order to allow employers more time to come into compliance with the law. While much of the ACA rolled out in October 2013, the mandate that employers with more than 50 full-time workers must provide health insurance coverage has been delayed until January 2015.
Employers may have breathed a sigh of relief at the initial announcement of this delay, but it’s important to remember that 2015 is just around the corner. Businesses who do not currently comply with the ACA should start making plans and budget decisions, so that they will be able to fully comply with the law by the beginning of 2015.
There are two primary ways in which employers with more than 50 full-time workers must comply with the ACA:
Therefore, it isn’t as simple as providing some type of health insurance; employers are also required to provide a plan which meets certain standards. This provision of the ACA seeks to cut out health insurance policies which are ineffective and too costly to the individual.
According to a study by Mercer, the penalty for businesses which fail to provide health insurance in 2015 will amount to and average of $173.33 monthly per employee. Multiplied by 12 months in the year, that could equal an average fine of $2079.96 per worker.
The penalty for providing an inadequate or unaffordable health care plan, as determined by regulations set forth by the ACA, is even more. Businesses who fail to comply with this part of the ACA can expect to pay and average of $260.00 per month, per employee – or $3,120.00 annually per worker.
With fines that steep, businesses with more than 50 full-time employees may want to spend 2014 making a plan to comply with the ACA by the start of next year.