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The Obamacare Employer Mandate: What Employees Need to Know

Americans have differing opinions on the Affordable Care Act, which is often referred to as Obamacare. Last year, the individual mandate went into effect, which required a large percentage of Americans to obtain health insurance or risk having to pay a penalty when tax time arrives. This year, a similarly contentious part of the law goes partially into effect: the employer mandate. What this means is that at least some employees finally have a right, of sorts, to have their employers pay for a portion of their health insurance.

Americans have differing opinions on the Affordable Care Act, which is often referred to as Obamacare. Last year, the individual mandate went into effect, which required a large percentage of Americans to obtain health insurance or risk having to pay a penalty when tax time arrives. This year, a similarly contentious part of the law goes partially into effect: the employer mandate. What this means is that at least some employees finally have a right, of sorts, to have their employers pay for a portion of their health insurance.

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What Is the Employer Mandate?

The employer mandate is a portion of Obamacare that is also known as the “employer shared responsibility payment.” According to the IRS, the law requires some businesses with 50 or more full-time employees that do not provide affordable adequate health insurance to their employees to make an employer shared responsibility payment if at least one of their full-time employees receives a premium tax credit for purchasing health insurance on one of the exchanges. That means that if you wind up having to go to an exchange to get insurance because your employer will not provide it, then your employer is going to get hit in the pocketbook.

What Portion of the Mandate Is Now in Effect?

The Washington Times reports that the first part of the employer mandate went into effect on January 1 of this year. This portion of the law was originally supposed to go into effect one year ago, but the government delayed its implementation. While the mandate will eventually affect companies with over 50 or more full-time employees or the equivalent, for now only companies with 100 or more workers will be covered. These employers will be required to provide affordable health insurance to at least 70 percent of their employees or they will face heavy fines. Next year, in 2016, employers with 50 to 100 workers will be governed by the law as well, and the hefty fines will apply to employers who are not insuring at least 95 percent of their employees. Smaller businesses are not covered by the law and will never be directly affected by this mandate. The fine the covered businesses will have to pay is $2,000 per employee who is not covered.

What Is Full-Time Work?

Currently, for Obamacare purposes, a full-time worker is one who works 30 or more hours per week. However, according to The Washington Times report, Republican congressional leaders say they will make an effort to change the definition of full-time workers from those who work 30 hours or more a week to those who work 40 or more hours per week.

Tell Us What You Think

Is your large employer refusing to provide health insurance to you or your co-workers? We want to hear from you! Leave a comment or join the discussion on Twitter.

Daniel Kalish
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Brandon
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Brandon

Coming from California to Nevada I was hoping the employer mandate wouldn’t be in affect in the state of Nevada but I’m not that lucky. I’m 21 years old and all the young workers know since this law came into affect we went from getting 34-38 hours a week to 24-28 hours a week. All the new data showing job increases doesn’t count in the fact that since we lost 10 hours a week the employers have to hire more workers to cover the lost of hours. I understand the point of it as in to create jobs but the… Read more »

Leah
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Leah

Another option for employers would be to cancel group plans and give employees money to purchase their own insurance. The way Americans get health insurance is changing and people want to be more involved in their health care decisions. For some larger companies, it is still cheaper to pay penalty and give employees a stipend then offer group health insurance with sky high premiums.

The new book, “The End of Employer-Provided Health Insurance” explains this paradigm shift and why its good for businesses and their employees.
Interesting read in considering the current changes in healthcare.

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