Large Employer 50+ Employees

The Affordable Care Act states that large employers and the federal government have a shared responsibility to offer minimum essential coverage to full-time employees. This responsibility falls on employers with 50 or more full-time and full-time equivalent employees.

What is a large employer?
A large employer is one with 50 or more full-time employees and/or full-time equivalents (FTEs). Full time is defined as any employee who works 30 or more hours per week on average. There is an exception for seasonal employers that says an employer is not large if its workforce exceeds 50 full-time employees for four months or fewer during the preceding year. A seasonal employer is not required to offer benefits to its workforce. Unsure if you are a small or large employer? Use our FTE calculator to find out.

Will I pay a penalty if I don’t offer health benefits to all full-time employees?
Yes, if at least one employee accesses federal help to pay for coverage through the new Health Insurance Marketplace (formerly called exchange). Under the Affordable Care Act, large employers (those with 50 or more full-time employees) are fined $2,000 for every full-time employee (less the first 30) if they do not offer minimum essential coverage. A different penalty applies if the coverage is not affordable.

What is minimum essential coverage?
Minimum essential coverage measures two things: the comprehensiveness of the plan and its affordability. By law, the plan must offer minimum value meaning it must pay for at least 60% of medical expenses on average for a standard population. The affordability test requires that the employee’s premium contribution for self-only coverage for the lowest cost plan cannot exceed 9.5% of employee wages.

Which employees are full-time and must be offered benefits?
Full-time employees and their dependents must be offered minimum essential coverage. Note: An offer of coverage to employees’ spouses is not required. Guidelines have been established to help employers with variable hour employees determine which of these employees are full-time and benefits eligible.

Do I have to make changes to my benefits or how they are offered?
Yes, there are a few changes that large employers have to make to their plan upon renewal: new out-of-pocket maximum limits are imposed, waiting periods cannot exceed 90 days and non-discrimination rules may apply. However, many changes that apply to small group plans are not applied to the large group market.

What will coverage cost?
New taxes and fees will have the most impact on the cost of health benefits in 2014. The ACA has added five taxes and fees to the purchase of most plans.

Will my employees pay a penalty if they don’t have health insurance?
Yes. The law requires Americans to carry health coverage or pay a penalty on their annual income tax filing. The penalty is 1% to 2.5% of household income or a flat fee, which starts as low as $95 per adult in the first year and increases to $695 by 2016. The penalty for children is half the adult penalty.


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