Health Care Reform Act

Chapter 2 EMPLOYER SHARED-RESPONSIBILITY PAYMENTS

LEARNING OBJECTIVES

After completing this chapter, you should be able to do the following:

• Estimate firm size based on full-time equivalents (FTEs) to determine which firms are potentially liable for an employer shared responsibility payment.
• Recall the correct definition of dependent for dependent coverage under the employer-shared responsibility payments.
• Identify what factors trigger an employer shared responsibility payment.
• Calculate potential penalties for employers who currently provide health insurance coverage and for those who do not provide health insurance coverage.
• Identify how potential penalties are applied in a controlled group.

INTRODUCTION

Employer-sponsored coverage remains an important source of health insurance for 68 percent of working adults.¹ To ensure that employers continue to provide some degree of health insurance coverage, the Patient Protection and Affordable Care Act (ACA) includes a shared-responsibility provision.²

The provision does not explicitly mandate that employers offer their employees acceptable health insurance coverage. However, it does impose financial penalties on firms with at least 50 full-time employees including FTE employees, if one or more of their full-time workers obtains a premium credit through the newly established health insurance exchanges. The amount of the penalty will depend on whether or not the employer provided health insurance coverage and the nature of ...