Employer Mandate: Large employers (50 or more full-time employees or full-time equivalents) are required to offer health insurance to their employees that meet certain minimum essential coverage requirements. The determination of large employer status is made on an annual lookback basis, and the employer must exceed the 50 employee threshold for more than 120 days during the lookback period and not be a seasonal employer. In 2015 large employers will have to pay a penalty. An employer may require an employee to contribute to premium payment 9.5% of their income.
Individual Mandate: January 1, 2014, each U.S. citizen will have to be covered by health insurance that meets minimum essential coverage requirements. Those not covered by an employer health care plan, Medicare or Medicaid, will have to purchase insurance or pay a penalty.
Pre-Existing Conditions: The health care law prohibits insurance companies from denying coverage or charging higher premiums based on an applicant’s health (pre-existing condition).
Exchanges: The health care law requires States to set up an exchange, and an internet portal where people can seek insurance and get information about coverage options and fees. If the State does not provide the exchange, the federal government will establish the exchange. The exchanges are required to be established by October 1, 2013.
Subsidies: Families with income between approx. $24,000 and $94,000 may receive a federal subsidy when they purchase insurance from the exchange. Workers eligible for employer provided insurance are not eligible for a subsidy.
Full-time Employee: An individual employed an average of at least 30 hours per week or 130 hours per month for each month in the prior calendar year.
Full-time Equivalent (FTE) employee: The employer sums the aggregate number of hours of service per month by all non-full-time employees (120 hours for any employee per month)
Small businesses with less than 50 full-time employees or full-time equivalents are not subject to the penalty for failing to provide insurance to their employees.
Businesses are not required to provide insurance to part-time employees, defined by the Act as employees who work fewer than 30 hours per week.
Large businesses with 50 or more full-time employees or full-time equivalents are required to offer full-time employees insurance in 2015. Large businesses that fail to offer minimum essential coverage to its full-time employees and do not meet any of the Act exceptions will be subject to a penalty of $2,000 per employee prorated per month. If the employer offers coverage that does not meet the minimum essential coverage and affordability provisions or has one full-time employee that enrolls in an exchange, the employer penalty is $3,000 per employee prorated per month.