Obama Care is the now well-known law that is reshaping health insurance policies in the United States. Part of the Obama Care plan is the employer mandate. The Employer mandate states that all businesses that have more than 50 full-time equivalent (FTE) employees have to give their employees health insurance. If the business owner in question doesn’t provide that health insurance, they will be required to pay a tax fee. That fee is called the “shared responsibility fee.”
The Purpose of the Fee
The shared responsibility fee is part of the Obama Care employer mandate for a reason. That reason is to make sure that all businesses share the responsibility for contributing to health care costs. In other words, whether the business owner buys health insurance for their employees or pays the tax fee, they will be paying for some sort of healthcare costs. Those payments will help to cover unpaid medical bills, mainly from emergency room visits.
The Amount of the Fee
Originally, the Obama Care Employer mandate was supposed to start in 2014. It has now been pushed back to 2015. However, once it starts, the fees for not meeting the requirements will be charged to business owners who don’t comply.
There are two different primary fees, depending on the situation. The first fee is $2,000 per full-time employee paid once per year, if the business has over 50 employees and doesn’t provide affordable health coverage. However, the business will not have to pay that fee for the first 30 employees. That fee is also expected to go up each year, depending on how much the insurance premiums go up.
Some businesses may have to pay the higher fee of $3,000, instead. That will happen in cases where the business offers coverage, but that coverage doesn’t cover at least 60% of employee healthcare costs, or the employee has to pay 9.5% or more or their total family income for health insurance. Again, the fees may go up each year with insurance premiums, but the fee does not need to be paid for the first 30 employees and some tax credits may be available for the business owner to offset some of those fees.
Most Businesses Won’t Have to Worry
One important thing to know about the Obama Care Employer mandate is that it doesn’t affect every business. In fact, about 965 of American businesses have less than 50 full-time employees. So, those businesses won’t be required to pay the shared responsibility fee or provide insurance. The shared responsibility fee is mostly to ensure that larger businesses contribute to healthcare costs.
If you are still not sure how the Obama Care Employer mandate may affect you, you can visit http://obamacarefacts.com/obamacare-employer-mandate.php for more details about the requirements and to learn how to obtain health insurance for your employees.