New healthcare laws can be confusing for small businesses to navigate, but nevertheless there are stiff penalties if your company meets the criteria for mandatory healthcare provision and you fail to do so. Understanding your responsibility to your employees and complying with the new Affordable Care Act laws is essential to avoiding fines.
What is the Employer Mandate?
Under the Affordable Care Act, or ObamaCare, the Employer Mandate requires that employers with over 50 full-time equivalent employees must provide health insurance for 95% of their full-time employees and dependents up to the age of 26 (at minimum), or face a significant fine. While this was meant to be implemented in 2014, the confusion and learning curve required to adhere to these new policies means employers with over 50 full time equivalent employees should not expect a fine until 2016 if they fail to provide health insurance.
The fee employers must pay for not providing healthcare coverage for workers is $2,000 per full time equivalent employee, with an exception for the first 30 workers. If an employer provides affordable coverage to most employees but the 95% threshold is not met, the fee is $3,000 per employee who required cost assistance through the Affordable Care Act. However, there is a cap on the penalties and employers will not be required to pay fines that total more than $2,000 per employee.
Adhering to the 90 Day Maximum Waiting Period
The Affordable Care Act also specifies the maximum amount of time a new employee can wait before being offered health insurance by an employer. All eligible new employees must be offered health insurance within 90 days of their start date.
Incentives for Compliance
Under the Affordable Care Act, employers are given incentives for promoting employee health and wellness. This helps offset the cost of providing employees with health insurance. If your company has a wellness program that is contingent on the health of your employees – such as a wellness program that rewards employees for tobacco use cessation or achieving a target cholesterol level — you could receive up to a 30% reimbursement of health coverage costs.
When Employee Healthcare Is Difficult to Navigate
Many small businesses are struggling with the new ObamaCare laws and the requirement to ensure that their employees have affordable health coverage. At Insight Performance, we can help your business better understand the current health marketplace and how you can remain in compliance with the new laws in order to avoid penalties and create an overall healthier and more rewarding workplace for your employees.
Learn more about employee benefits like healthcare by contacting us for a consultation with one of our experienced human resources specialists. We can provide you with the comprehensive assistance you need to ensure that your business is set up for success.