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Preparing for the Affordable Care Act Employer Mandate
As of Jan. 1, 2015, the Patient Protection and Affordable Care Act (ACA)” otherwise known as Obamacare ' begins to impose certain health coverage requirements on employers who have at least 50 employees. Even though its implications are almost a year away, it is not too soon for employers to prepare for the Employer Mandate. Employers would be wise to figure out if the mandate applies to them, understand the potential penalties that can be imposed on them and, taking into account all of the various considerations, decide if they want to pay or play.
What Is the Employer Mandate?
Beginning in 2015, the ACA will impose numerous obligations on employers who meet certain defined threshold requirements. Ultimately, if an employer is a covered entity under the mandate, it will have to provide the requisite health coverage to its employees or face financial penalties for failure to do so. In particular, if such an employer does not offer “affordable” health coverage that provides a “minimum” level of coverage to its full-time employees, the employer will be subject to a penalty if at least one of its full-time employees receives a subsidy for purchasing individual coverage on a state or federal health benefits exchange (referred to as the “exchange” or the “marketplace”). The circumstances presented to employers as to whether to provide the requisite coverage or subject themselves to the corresponding penalties has become known as the Pay or Play Mandate.
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