Penalty for not providing Health Insurance –
Minimum Essential Coverage (MEC)
is
$2,000/employee

Basically the penalty for not providing Health Insurance – Minimum Essential Coverage (MEC) is $2,000/employee.

The penalty if coverage is not affordable 9.86% or does not provide minimum valueBronze Plan is $3k/employee. The details get quite confusing… so follow the links in the right hand column and below to see how it would apply to your group, situation, what you are offering and if any of your employees apply to Covered CA for subsidies.

 

How Coverage You Offer (or Don’t Offer) May Mean an Employer Shared Responsibility Payment for Your Organization

Under the Affordable Care Act, certain employers, based on workforce size – called applicable large employers – are subject to the employer shared responsibility provisions. The vast majority of employers fall below the workforce size threshold and, therefore, are not subject to the employer shared responsibility provisions.

If you are an employer that is subject to the employer shared responsibility provisions, you may choose either to offer affordable minimum essential coverage that provides minimum value to your full-time employees and their dependents, or to potentially owe an  employer shared responsibility payment to the IRS.  Many employers already offer coverage that is sufficient to avoid owing a payment.

If your organization is an applicable large employer, and you choose not to offer affordable minimum essential coverage that provides minimum value to your full-time employees and their dependents, you may be subject to one of two potential employer shared responsibility payments.

More specifically, you may need to make an employer shared responsibility payment to the IRS if you are an applicable large employer and either of these circumstances applies for 2015:

  • You offered minimum essential coverage to fewer than 70 percent of your full-time employees and their dependents, and at least one full-time employee enrolled in coverage through the Health Insurance Marketplace [Covered CA]  and received the premium tax credit.
  • You offered minimum essential coverage to at least 70 percent of your full-time employees and their dependents, but at least one full-time employee enrolled in coverage through the Health Insurance Marketplace [Covered CA] and received the premium tax credit.  A full-time employee could receive the premium tax credit because the coverage that was offered was not affordable, did not provide minimum value, or was not offered to the full-time employee.

For both of these circumstances, the 70 percent threshold changes to 95 percent after 2015.

The terms “affordable” and “minimum value” have specific meanings under the Affordable Care Act that are explained in questions 19 and 20 on the employer shared responsibility provision questions and answers page on IRS.gov/aca.  Transition relief for offers of coverage to dependents for 2015 is described in question 33 on the same page.

For more information on the information reporting responsibilities that apply to applicable large employers see our Questions and Answers on Reporting of Offers of Health Insurance Coverage by Employers.

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Solutions, Resources & Links

IRS Website on Shared Responsibility Provisions – Mandate Penalties

IRS FAQ’s Shared Responsibility Penalties

Penalty Calculator

NAHU Analysis of Tax Penalties newsmanager.commpartners.com

What’s the minimum – MEC Minimum Essential Coverage Balch & Bingham Esq

Affordable Health Insurance 9.5% of employee only cost

Our Webpage on Ben E Lect – offering Self Funded & MEC plans optimedhealth.com

Explanation and solution from OptimedNo charge for our broker service and consultation  42 U.S. Code § 18021

The IRS is taking the responsibility of enforcing the ACA  ACA Times

Simple and low-cost ACA solutions. Avoid the MEC/MV penalties.

1) Self-Funded. Penalty “A” Compliance Plans: Five MEC options:

  1. MEC Basic $35pepm.
  2. MEC Enhanced includes: Telehealth, and 3 Primary Care Visit.
  3. MEC Plus includes: unlimited Primary Care, Specialties, Urgent Care visits.
  4. MEC Plan with 3 Hospital Indemnity Options.
  5. MEC Plan with “Discount Benefits”. Over thirty Discount Benefit combinations.

 2) Self-Funded. Penalty “A” & “B” Compliance Plans. Two MVP options:

  1. Basic MEC & MVP offering with no participation Starting at $49.15pepm
  2. MEC Plus & MVP offering includes: Limited Primary Care, Specialist & Urgent Care Visits.

Costs include: Plan Documents, Multiplan Network, ID Cards, Enrollment Guides, Claims adjudication, SBCs, COBRA administration and claim reserves. Minimum participation of 25 lives enrolled.

Email us [email protected] to learn more and get a proposal.

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