October 29, 2014
As a reminder, the employer shared responsibility (penalty) portion of the Affordable Care Act will be applied beginning on January 1, 2015. Therefore, all large employers (generally employed 100 or more full-time employees during 2014) are required to offer affordable health insurance to their employees that provides minimum essential coverage. Large employers who fail to do so will be subject to a shared responsibility payment (penalty).
For 2015 there is transitional relief from the penalty for businesses that employed between 50 and 100 full-time equivalent employees during 2014. To be eligible, an employer must meet the following conditions:
If they do not meet these conditions, then the definition of a large employer is 50 or more full-time employees during 2014.
Generally, a large employer will be subject to a shared responsibility payment (penalty) for 2015 once at least one full-time employee receives a premium tax credit and:
The affordability standard is not met if an employee’s required contribution for self-only coverage exceeds 9.5% of their income.
The minimum value standard is not met if the employer’s plan pays less than 60% of covered expenses.
The definition of full-time equivalent employees includes all full-time employees plus the full-time equivalent for part-time employees.
An employee is considered full-time for a calendar month if they average at least 30 hours of service per week or 130 hours of service per month. The full-time equivalent for part-time employees is calculated as the total hours for each month of all part-time employees divided by 120.
For more information on the employer shared responsibility payment see:
Kiddie Tax Change and Form 8615
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2019 Federal Return and the Affordable Care Act
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