The Affordable Care Act (ACA), also known as Obamacare, is a landmark healthcare reform signed into law in March 2010. One of the key provisions of the ACA is large employers are required to provide affordable health insurance coverage to their employees or face penalties. In this post, we will explore the impact of the ACA on large employers.
First, let’s define what we mean by a large employer. According to the ACA, a large employer is any business with 50 or more full-time employees or the equivalent in part-time employees. These businesses are required to provide health insurance coverage to their full-time employees or pay a penalty.
The health insurance coverage offered must meets certain minimum standards. The coverage must be “affordable,” meaning the employee’s share of the premium cannot exceed 9.5% of their income. The coverage must also meet a minimum value standard, which means it covers at least 60% of the cost of covered benefits.
If a large employer fails to provide affordable health insurance coverage that meets the minimum value standard, they may be subject to penalties. This penalty is calculated based on the number of full-time employees, excluding the first 30 employees. For example, if a large employer has 100 full-time employees and fails to provide health insurance coverage, they may be subject to a penalty of $2,000 per employee, or $140,000.
ACA’s impact on large employers
Some employers have chosen to reduce the number of hours worked by their employees in order to avoid the requirement to provide health insurance coverage. Others have shifted to offering part-time positions in order to avoid the requirement altogether. However, these strategies have also resulted in lower wages for employees, making it difficult for them to afford healthcare on their own.
On the other hand, some large employers have embraced the ACA and have gone above and beyond the minimum requirements. For example, some employers have expanded their health insurance coverage to include preventive care services and wellness programs. Others have offered additional benefits, such as paid time off for employees to attend medical appointments or participate in health and wellness programs.
Overall, the ACA has had a mixed impact on large employers. While it has provided access to affordable healthcare coverage for many employees, it has also created challenges for employers who are struggling to comply with the requirements. Moving forward, it will be important for policymakers to continue to monitor the impact of the ACA on large employers and to consider ways to make healthcare more accessible and affordable for all Americans.
If the ACA has put a strain on your business’ finances, contact IBT Consulting. We can analyze your current coverage and work with you to find solutions to protect your bottom line, while getting you the coverage options you need to attract and retain the best talent.