Individual citizens aren’t the only ones affected by insurance coverage requirements under the Affordable Care Act (ACA). Larger companies are also subject to the ACA coverage provisions issued by the U.S. Treasury Department and Internal Revenue Service on February 10, 2014.
These coverage provisions, known as the Employer Shared Responsibility provisions, require large businesses to offer compliant employee health coverage or owe an Employer Shared Responsibility payment. These employer provisions became effective on January 1, 2015.
Small Employers: Companies with fewer than 50 full-time employees are exempt from the Employer Shared Responsibility provisions. According to the U.S. Treasury Department, these smaller companies make up approximately 96% of businesses.
Large Employers: A business with 50 or more full-time employees is considered a large business under the Affordable Care Act and is therefore applicable to the employer provisions. To avoid the fine for failing to offer health coverage, these large businesses must offer coverage to 95% of their full-time employees beginning in 2016.
According to the IRS, if these large employers do not offer affordable health coverage that meets a minimum standard of coverage to at least 95% of their full-time employees (and their dependents), the employer may be subject to the Employer Shared Responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage through the Health Insurance Marketplace.
An employee’s classification as a full-time employee is based on his or her hours of service. Under the Employer Shared Responsibility provisions, an employee is a full-time employee for a calendar month if he or she averages at least 30 hours of service per week. Under final regulations, 130 hours of service in a calendar month is considered the monthly equivalent of at least 30 hours of service per week.
Federal health coverage regulations clarify whether the following types of employees qualify as full-time employees:
If you work full time for a large company, your employer will be required to offer health coverage to you or be subject to a fine. If your employer chooses to forgo offering health coverage and instead pay the fine, you can purchase individual coverage on the health insurance exchange without worrying about being rejected.
Pricing for coverage is based on five factors, and health isn’t one of them.
HCCMIS offers Short Term Medical (STM), underwritten by HCC Life Insurance Company. STM is health insurance for people younger than 65 looking to cover themselves or their families in temporary situations, like deciding whether to purchase employer coverage. You can customize your coverage to meet your needs by selecting the deductible, coinsurance, and length of coverage.
If your employer doesn’t offer health coverage and you decide to buy a plan in the Health Insurance Marketplace, you’ll face a coverage gap of 15 to 45 days. STM is a great complement to an ACA plan, as it offers affordable coverage throughout this waiting period. Coverage for STM policies can be as short as one month, and you can tailor the length of coverage to your individual situation.