The End of Employer-Provided Health Insurance: Why It's Good for You and Your Company

Appendix B: Is Your Company Required to Offer Employer-Provided Health Insurance?

No—your company is not required to offer employer-provided health insurance coverage. However, if your company has more than 50 employees you may be required to make a payment called the employer shared responsibility payment (or tax penalty). This is commonly referred to as the employer mandate or the play-or-pay requirement. This appendix will help you (1) determine if you are subject to the employer mandate, and (2) if you are subject to the mandate, calculate the amount of your shared responsibility payment.

Is Your Company Subject to the Employer Mandate?

Tip: If you have fewer than 50 full-time-equivalent employees, you are not subject to any employer shared responsibility payments for not offering employer-provided coverage.

A full-time employee is defined as working on average at least 30 hours per week in a given month. For purposes of determining whether your company is subject to the employer mandate, you must include all full-time employees plus the full-time equivalent of your part-time employees.

To calculate the full-time equivalent of part-time employees, add the number of hours worked by part-time employees in a given month and divide the total by 120. The sum of the full-time employees and the full-time equivalent of the part-time employees is the number (FTEs) you use to determine ...