Employer Mandate in Reform
Employers with 50+ full-time employees or full-time equivalents must offer medical coverage that is "affordable" and provides minimum value to full-time employees and their children up to age 26 or face penalties. This chart shows how the employer mandate will be phased in based on employer size.
|Employer Size||2015 Plan Year||2016 Plan Year and Beyond|
|1-49 full-time employees||Does not apply||Does not apply|
|50-99 full-time employees*||Does not apply||Employer must offer coverage to 95% of full-time employees and dependents to age 26**|
|100 or more full-time employees||Employer must offer coverage to 70% of full-time employees and dependents to age 26**||Employer must offer coverage to 95% of full-time employees and dependents to age 26**|
* For 2015, these employers will need to certify that they are not reducing the size of their workforce to stay below 100 employees.
** Coverage for dependents must be available through the end of the month in which they reach age 26.
Coverage is "affordable" if employee contributions are less than 9.5% of:
- Employee's W-2 wages (reduced by any salary reductions under a 401(k) plan or cafeteria plan)
- Employee’s monthly wages (hourly rate x 130 hours per month),
- Federal Poverty Level for a single individual
A plan must pay 60% of the cost of covered health services to provide "minimum value." The minimum value calculator is available online.
U.S.-issued expatriate plans meet the employer mandate.
Effective July 16, 2014, the employer mandate no longer applies to insured plans issued in the U.S. territories (Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and the Northern Mariana Islands). A territory may enact a comparable provision under its own law.
This graphic summarizes the coverage requirements and the penalties that apply if any full-time employee purchases coverage on the Marketplace and receives a federal premium subsidy.
Read the most recent Employer Mandate guidance:
- Final Rules Released on Information Reporting for Employers and Insurers - 3/07/2014
- 90 Day Waiting Period Final and Proposed Regulations Issued - 2/21/2014
- Employer Mandate Final Regulations Issued - 2/11/2014
- Proposed Rules on Shared Responsibility Payments Pertaining to Certain Individual and Employer-Sponsored Plans - 1/24/2014
More on Reform
PUBLIC MARKETPLACES/ EXCHANGES
Marketplaces are the government run online shopping hubs for health insurance, available in every state.
INDIVIDUAL MANDATE IN REFORM
Under health care reform law, all people must have minimum essential coverage beginning January 1, 2014.
HEALTH CARE REFORM FEES AND TAXES
New fees and taxes will generate revenue to help fund expanded programs. Employers will pay some fees while others will be paid by insurers and individuals.