Certain small employers (employing less than 50 full-time employees) are exempt from the employer mandate provisions. Beginning in 2015, employers with 100 or more full-time employees and full-time equivalents may be subject to a penalty if they do not offer their full-time employees the opportunity to enroll in a medical plan that provides minimum essential coverage (MEC), is affordable and meets minimum value requirements. If the employer does not offer MEC, the employer may be subject to a $2,000* per full-time employee per year penalty if even just one full-time employee applies and is found eligible for an applicable premium tax credit or cost-sharing reduction under the public insurance exchange. If the employer's coverage meets MEC but the coverage is deemed unaffordable and does not provide minimum value for some full-time employees, those employees may also obtain health insurance through a public insurance exchange and qualify for an applicable premium tax credit or cost-sharing reduction. In such case, the penalty would be $3,000* per full-time employee who qualified for the applicable premium tax credit or cost-sharing reduction.
*It is important to note that although the penalty enforcement was delayed until 2015 and in some cases 2016, the penalty amount is based on a 2014 enforcement date. Therefore, the penalty amounts listed ($2,000 and $3,000) will be adjusted annually, starting in 2015, and these numbers only reflect an estimate, not the true cost of the penalty.
While voluntary compliance with the mandate was encouraged for 2014, the penalty does not go into effect until 2015 for employers with 100 or more full-time employees and full-time equivalents, and 2016 for most employers with 50-99 full-time employees and full-time equivalents.