The ObamaCare employer mandate / employer penalty, originally set to begin in 2014, will be delayed until 2015 / 2016. The ObamaCare “employer mandate” is a requirement that all businesses with over 50 full-time equivalent (FTE) employees provide health insurance for their full-time employees, or pay a per month “Employer Shared Responsibility Payment” on their federal tax return.
Employer mandate update: Small businesses with 50-99 full-time equivalent employees will need to start insuring workers by 2016. Those with a 100 or more will need to start providing health benefits in 2015. Health care tax credits have been retroactively available to small businesses with 25 or less full-time equivalent employees since 2010.
The employer mandate is officially part of the Employer Shared Responsibility provision. Under the Affordable Care Act, the federal government, state governments, insurers, employers and individuals are given shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States.
The Employer Mandate Fee / Employer Shared
The annual employer mandate fee (officially called an Employer Shared Responsibility Payment) is a per employee fee for employers with over 50 full-time equivalent employees who don’t offer health coverage to full-time employees.
• The employer mandate is based on full-time equivalent employees, not just full-time employees.
• The fee is based on whether or not you offer affordable health insurance to your employees that provides minimum value (explained below).
• The annual fee is $2,000 per employee if insurance isn’t offered (the first 30 full-time employees are exempt).
• If at least one full-time employee receives a premium tax credit because coverage is either unaffordable or does not cover 60 percent of total costs, the employer must pay the lesser of $3,000 for each of those employees receiving a credit or $750 for each of their full-time employees total.
• The fee is a per month fee due annually on employer federal tax returns starting in 2015 for small businesses with 100 or more full-time equivalent employees(2016 for those with 50-99). So the per month fee is 1/12 of the $2,000 or $3,000 per employee.
• Unlike employer contributions to employee premiums, the Employer Shared Responsibility Payment is not tax deductible.
• The Internal Revenue Service has more information about the Employer Shared Responsibility Payment.
The employer mandate fee is officially referred to as a “shared responsibility payment”, as the fee will help to go to help fund marketplace subsidies and to compensate for unreimbursed emergency health care provided to the uninsured