Healthcare Coverage for Employers

The Cost of Healthcare Coverage for Employers

The Affordable Care Act Employer Mandate and Your Business

While the employer mandate under the Affordable Care Act has been delayed until 2015, there are plenty of reasons for employers to assess their options for employee healthcare coverage. Whether it’s exploring High Deductible Health Plans or Accountable Care Organizations, employers should take the time to find the best fit.

Employers should familiarize themselves with the details of the Affordable Care Act’s minimal essential coverage, and the penalties that businesses will face for not complying. Below is a quick overview of what the law states and what it means relative to current employer healthcare costs.

 
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Graphic displaying: The Cost of Healthcare Coverage for Employers On January 1, 2014, the ACA mandate requires all individuals to have minimum essential heath coverage. Employers, on the other hand, have until 2015 to comply or pay a penalty.  For some companies, offering health insurance is solely a financial decision, but for most, it will be a mixture of their mission, the cost and their ability to hire and retain staff. Average Annual Cost of Coverage per employee, all plan types:  Percent of employers currently offering heath insurance: Mid-sized – 98%. Small – 35%.  2013: Single - $5,884. Family - 16,351 2012: Single - $5,615. Family - $15,745.  Percent of employers considering dropping coverage and paying penalty: Mid-sized – 23%. Small – 19%.
Graphic displaying: Average Annual Cost of Coverage per employee, all plan types: 2011: Single - $5,429. Family - $15,073  2010: Single - $5,049. Family - $13,770.  2009: Single - $4,824. Family - $13,375.  ACA Employer Mandate - Minimum essential coverage: Number of fulltime employees: 1-49 exempt. 50+ required. At least 95% of employees must be covered. Coverage must pay 60% of expenses.  Coverage must not exceed 9.5% of employee’s family income.
Graphic displaying: Penalties for Noncompliance. Companies with 1 to 49 fulltime employees: Penalty does not apply. Possible health insurance credit for 25 or fewer employees with average wage up to 50,000. Companies with 50+ fulltime employees: Coverage is not offered - At least 1 employee receives Premium tax credit / Exchange subsidy. Penalty: $2,000 annually times the number of tax-credit employees minus 30 times the number of months equals the penalty.
Graphic displaying: Companies with 50+ fulltime employees: Coverage does not pay for at least 60% of expenses or Coverage is offered but costs over 9.5% of family income: Employees opt for an exchange and premium tax credit. Penalty is $3000 annually times the number of tax-credit employees minus 30 times the number of months in violation equals the penalty. Notes: By Defination, a full time employee works an average of 30 hours weekly or at least 130 hours a month. Penalties will increase annualy proportionate to insurance premiums. Sources: 2013 Chase Business Leaders Outlook Survey, The Henry J. Kaiser Family Foundation 2013 Employer Health Benefits Survey, The Congressional Research Service, BusinessUSA. Copyright 2013 JPMorgan Chase Bank, N.A. Member FDIC. IG_13_002.