Dear M & M: Do I have to provide health insurance to my employees? – Jack
Dear Jack: As of January 1, 2016 no business has to provide or offer health insurance to your employees. However, with that being said currently, the Affordable Care Act includes a mandate for certain large employers. Generally if you have more than 50 full time equivalent employees (FTE) you must offer qualified and affordable health benefits. The penalty can be as high as $2,600 per FTE employee. This is most commonly referred to as the employer mandate or pay to play requirement of the employers shared responsibility to offer health benefits. It is important to understand whether your business is defined as a large or small business as the employer mandate and employer tax penalties may apply to your business. As always please check with a competent attorney familiar with the Affordable Care Act rules and regulations. To determine if you are considered a large business one must calculate the number of full time employees (FT) and part time (PT) employees. FT employees work an average of 30 hours per week or 130 hours per calendar month including vacation and paid leave absence. Full Time Equivalent (FTE) employees are determined by taking the number of hours worked in a month by PT employees (those working less than 30 hours per week), and then dividing by 120. Remember these rules, calculations and regulations are complex, employers should consult with legal counsel. Source: CIGNA Employer Mandated Fact Sheet.