Under the Affordable Care Act, applicable large employers are subject to the employer shared responsibility provisions. They must either offer affordable minimum essential coverage to full-time employees and their dependents, or pay an employer shared responsibility payment to the IRS.
If your organization is an applicable large employer, (that is, it has 50 or more full-time or full time equivalent employees) and you choose not to offer coverage to your employees and their dependents, you may be subject to one of two potential employer shared responsibility payments if either of these circumstances applies for 2015:
- You offered minimum essential coverage to fewer than 70% of your full-time employees and their dependents, and at least one full-time employee enrolled in coverage through the Health Insurance Marketplace and received the premium tax credit. (The 70% threshold changes to 95% after 2015.)
- You offered minimum essential coverage to one or more full-time employees and their dependents but the offered coverage for the full-time employee was not affordable and/or did not meet minimum value, but at least one full-time employee enrolled in coverage through the Health Insurance Marketplace and received the premium tax credit. (A full-time employee could receive the premium tax credit because the coverage that was offered was not affordable, did not provide minimum value, or was not offered to the full-time employee.)
The specific meanings of the terms “affordable” and “minimum value” under the Affordable Care Act are explained by the IRS on its employer shared responsibility provision questions and answers page.
Transition relief for offers of coverage to dependents for 2015 is described in question 33 on the same page.
More information on reporting responsibilities of applicable large employers is on the IRS website’s Questions and Answers on Reporting of Offers of Health Insurance Coverage by Employers.