Large group employers

Three options for health insurance in 2014

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  Offer health insurance (either fully insured or ASO) that meets the minimum coverage definition^* and is affordable.

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  Offer some level of coverage that does not meet minimum requirements and pay the employer penalty.

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  Stop offering coverage, let employees buy through the individual market exchange, and pay the employer penalty.

^*Minimum coverage is any medical insurance coverage that does not limit coverage to specific benefits such as dental or vision only. This includes major medical (or catastropic) plans. Minimum coverage does not have an actuarial value minimum (such as 60%) and does not need to be considered "affordable."

Penalties for large group employers

Health care reform does NOT require employers to:

• Contribute to the premium. (Although if they do not, their plan may not be affordable, putting the employer at risk for penalties.)

• If minimum coverage is not offered to full-time employees, and at least one employee gets subsidized coverage through an exchange, then a $2,000 penalty is assessed for each full-time employee (after the first 30).
• If minimum coverage is offered to full-time employees but it is not affordable for an employee, and that employee gets subsidized coverage through an exchnage, then a $3,000 penalty is assessed for each full-time employee getting subsidized coverage.