Should your businessPAY or PLAY?

Beginning in 2015 and 2016, many employers will have to provide health insurance for their employees or pay a penalty to the government. This is called the employer mandate, otherwise known as "pay or play." This short quiz can help you decide whether to pay or play

Who does this impact? tooltip

What will I learn? tooltip

What will I need to get started? tooltip

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How many actual full-time employees do you have?

Enter the number of actual full-time employees who worked an average of 130 hours per month during the six-month measurement period. tooltip

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Result

Because you have 30 or fewer actual full-time employees, you are not subject to the employer mandate. However, you still have obligations under the law.

You must:

  • Recalculate your employee numbers each year
  • Tell your employees about the health insurance marketplaces and opportunities they offer for individual coverage
  • Keep up with changes to the health care law, to make sure you continue to comply

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How many full-time equivalent employees do you have among your part-time workforce?

Enter the total number of hours worked by all your part-time employees during the six-month measurement period. tooltip 

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Next

Now we use these numbers to calculate your full-time equivalent employees.

Full-time equivalent employees are derived by adding your actual full-time employees to your equivalent part-time employees.

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Result

Because you have 50 or fewer actual full-time employees, you are not subject to the employer mandate. However, you still have obligations under the law.

You must:

  • Recalculate your employee numbers each year
  • Tell your employees about the health insurance marketplaces and opportunities they offer for individual coverage
  • Keep up with changes to the health care law, to make sure you continue to comply

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Should I provide insurance anyway?

Providing insurance, especially when you don't have to, can help you attract talented employees. Look at your benefits package strategically and consider the following before you make a decision:

  • Employee health and happiness

    Benefits decisions affect employee morale, loyalty, health and productivity.

  • Retention and recruitment

    Benefits affect a company's ability to hire and keep the best employees.

  • Tax advantages

    If you stop providing health care insurance, you could lose the favorable tax treatment you get from offering benefits.

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Result

You have more than 50 full-time equivalent employees. The government considers you a large employer.

What does this mean?

  1. You must provide insurance to at least 70% tooltip of your actual full-time employees.
  2. The insurance you provide must include essential health benefits. tooltip Learn more.
  3. The insurance must pay for at least 60%, tooltip on average across the plan, of an employee's health care costs in a given year.
  4. Insurance costs must not exceed 9.5% tooltip of household income for any employee.
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So, let's say you choose not to offer insurance, or its not affordable tooltip or doesn't meet the government's quality standards. tooltip

Two things to keep in mind about penalties

  • Penalties don't kick in unless one or more of your employees goes to the public health insurance marketplace for coverage and receives a tax credit or subsidy to help pay the premiums. tooltip
  • In 2015, penalties never apply to the first 80 of your full time employees. This will decrease to 30 in 2016.
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Penalty for not providing coverage at all:

If you don't offer coverage to at least 70% of your full-time employees AND one or more of them receive a tax credit or cost subsidy when purchasing health insurance on a public health insurance marketplace, your penalty would be:

Starting penalty dates
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Penalty for providing inadequate coverage:

Let's say you do offer insurance, but it doesn't meet minimum standards, or it's not affordable. What penalties do you have to pay?

Enter the number of employees who you estimate may be eligible to receive assistance tooltip on the health insurance marketplace.

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You still have obligations under the law.

You must:

  • Recalculate your employee numbers each year
  • Tell your employees about the health insurance marketplaces and opportunities they offer for individual coverage
  • Keep up with changes to the health care law, to make sure you continue to comply

« Start Over

Pay or Play?

Now that you know the penalties, you can weigh that cost against the cost of insuring employees. But be sure to look at your benefits strategically as direct costs aren't the only thing you should be concerned about.

  • Employee health and happiness

    Benefits decisions affect employee morale, loyalty, health and productivity.

  • Retention and recruitment

    Benefits affect a company's ability to hire and keep the best employees.

  • Tax advantages

    If you stop providing health care insurance, you could lose the favorable tax treatment you get from offering benefits.

« Start Over
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