In United States, many companies provide health insurance to their employees (i.e., an "employer-sponsored coverage"). Health insurance can also be purchased privately, received through a public program such as Medicaid or Medicare, or acquired through military service.
When an employee receives an employment benefits package from work, health insurance is typically included. Employers usually pay most of the insurance premium and employees may be required to make contributions to cover some costs.
The Health Care Reform: What’s an Employer Mandate?
Under the Affordable Care Act, beginning in 2015, employers who employ 50 or more full-time workers will be required to provide health care coverage to employees. If employers do not provide coverage, they will have to pay a fine, called an "employer shared responsibility payment (ESRP)." This provision may be referred to as an "employer’s mandate."
Required Employer-Sponsored Coverage
Concerning the employer-sponsored coverage requirements, keep in mind:
- Not only full-time employees should be covered, but also employees "equivalent to them."
- Dependents of full-time employees must be covered.
- Providing health coverage will not be enough; employers must make the coverage affordable for full-time employees.
- The employer-sponsored plan must also provide at least the minimum value; in other words, it must cover at least 60% of typical health expenses.
Employers’ Penalties: What Happens If Employers Fail to Provide Insurance?
Employers should consider the following outline for penalties they will face if they fail to carry out the Affordable Care Act provision regarding employer-sponsored insurance:
- Employers must pay $2,000 per each full-time employee: If just one employee ends up getting a federal subsidy in connection with health coverage, the employer will have to pay $2,000 annually for every full-time worker on the payroll.
- Employers must pay $3,000 per each subsidized full-time employee: If an employer does offer insurance coverage, but it is either unaffordable or/and it doesn’t provide the minimum coverage, then the employer will have to pay a $3,000 annual fee for every full-time employer receiving a subsidy (i.e., tax credit).
Note that every year, as insurance premiums grow, the above-mentioned penalties will likewise increase.
What If My "Small" Employer Does Not Want to Provide Coverage?
Under the Affordable Care Act, beginning 2014, non-exempt individuals are required to obtain insurance or pay a special penalty when they file taxes. This means that you may be required to purchase insurance through the special system of exchanges.
Otherwise, you may be subject to the following penalties:
- The greater of $95 or 1% of yearly income (2014)
- The greater of $695 or 2.5% of yearly income (2015)
Do I Have to Comply with Health Care Reform?
The Affordable Care Act does not apply to everyone. Certain individuals are exempt, including:
- Individuals who would be paying more than 8% of their income for health coverage
- Individuals who don’t have to pay taxes because their incomes are so low
- Individuals who don’t want to buy or carry insurance for religious reasons
- Individuals who are undocumented immigrants
- Members of Native American tribes
- Incarcerated individuals
When to Seek Legal Help
If you are an employee and believe that your employer is not providing you with adequate insurance, you may need to seek the advice of a qualified health insurance lawyer or an employment lawyer. A qualified lawyer can help you understand your employers obligations and whether or not you may have a legal claim.