Potential Employer Penalties Under the Patient Protection and Affordable Care Act (ACA) [open pdf - 396KB]
"Employer-sponsored health insurance is an important source of coverage for the nonelderly, covering about 58% of workers in 2011. Large firms were more likely to provide health insurance to their employees as compared to small firms. According to Kaiser Family Foundation, 99% of firms with 200 or more employees offered health insurance coverage to their workers, while 59% of firms with 3 to 199 employees offered health insurance coverage in 2011. Among very small firms (with 3 to 9 employees), 48% offered health insurance coverage. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) was intended to expand insurance coverage in the United States. To ensure that employers continue to provide some degree of coverage, the ACA includes a 'shared responsibility' provision. The provision does not explicitly mandate that employers offer their employees acceptable health insurance. However, it does impose penalties on certain firms with at least 50 full-time 'equivalent' employees, if one or more of their full-time employees obtains a premium tax credit through the newly established health insurance exchanges. An individual may be eligible for a premium tax credit if his or her income is below certain thresholds and the individual's employer does not offer health coverage, or offers insurance that is 'not affordable' or does not provide 'minimum value,' as defined by the ACA. This report describes the potential employer penalties, as well as proposed regulations to implement the ACA employer provisions. The regulations address insurance coverage requirements; methodologies for determining whether a worker is considered full time; provisions relating to seasonal workers and corporate franchises; and other reporting requirements."
CRS Report for Congress, R41159