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Large Business Employers

Health Reform Act Implications for Large Businesses

Although there is no requirement for large business employers (50 or more employees) to provide health insurance for employees, beginning in 2014 under the Health Reform Act they will be assessed a fee of $2,000 per full-time employee (excluding the first 30 employees) if they do not offer coverage and if they have at least one employee who receives a premium credit through a Health Insurance Exchange.

Additionally, if at least one employee receives a premium credit through a Health Insurance Exchange, then the large business employer will be required to pay the lesser of $3,000 for each employee who receives a premium credit or $2,000 for each full-time employee (in excess of 30 employees).

For those large business employers that offer health insurance coverage to their employees, there will be a requirement to provide a voucher to employees with incomes below 400% of the poverty level if their share of the premium cost is between 8 - 9.8% of income to enable them to enroll in a plan in an Exchange. The voucher amount is equal to what the employer would have paid to provide coverage to the employee under the employer’s plan and will be used to offset the premium costs for the plan in which the employee is enrolled.

Employers that offer a free choice voucher will not be subject to these penalties.

Large business employers that offer health insurance coverage will be required to automatically enroll their employees in the employer’s lowest cost premium plan if the employee does not sign up for employer coverage or does not opt out of coverage.

Large business employers with more than 200 employees will be required to automatically enroll employees into health insurance plans offered by the employer. Employees may opt out of coverage.

Employers with less than 50 employees are exempt from any of these penalties.¹