Overview

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Employers must offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their children up to age 26, or be subject to penalties. This is known as the employer mandate. It applies to employers with 50* or more full-time employees, and/or full-time equivalents (FTEs). Employees who work 30 or more hours per week are considered full-time.

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The employer mandate and employer penalties applicable to large employers (ALEs)

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The “A” Penalty

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In general, an ALE member will owe this first type of Employer Mandate payment (“A” penalty) if, for any month, it does not offer minimum essential coverage (MEC) to at least 95% of its full-time employees (FTEs) (and their dependents), and if at least one FTE receives the premium tax credit for purchasing coverage through the Marketplace.

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Employers subject to the employer mandate are required to offer coverage that provides “minimum value” and is “affordable,” or be subject to penalties. The chart below explains these requirements and the penalties that apply if they are not met.​

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The “B” Penalty

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Even if an ALE member offers MEC to a sufficient number of FTEs (and their dependents) to avoid the “A” penalty, the ALE may still owe the second type of Employer Mandate payment for each FTE (if any) who receives the premium tax credit for purchasing coverage through the Marketplace (“B” penalty).

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If an ALE owes the “B” penalty, the annual payment is $3,000 for each FTE who received the premium tax credit.

• For calendar year 2017, $3,390