Health Care Reform: How to Avoid Employer Penalties

One of the most debated elements of the Affordable Care Act was the “pay or play” obligation for large employers, which requires companies with at least 50 full-time employees to offer affordable health coverage or pay a financial penalty.  As a provider of employee benefit programs, AssuredPartners NL wants to ensure that employers understand the new rules and how to avoid these fines.

The description of this requirement as written above generates a lot of questions for employers who are close to the designated “50 full-time employees” line. Specifically, many companies want to know what defines a full-time employee and how do you measure whether your health coverage offering is “affordable” or not.

Last month, the IRS issued Notice 2012-58, which provides safe harbor methods and rules that employers may use to answer these questions.  This notice provides guidelines for determining an employee’s full-time status based on number of hours worked and other qualifications.  It also explains how W-2 wages can be used as an indicator of a health plan’s affordability.

Our employee benefits specialists encourage all employers and human resource leaders to read Notice 2012-58 to avoid potential penalties under the Affordable Care Act.  Also, please contact your AssuredPartners NL representative for a more detailed understanding of these new rules and how they could impact your company.

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