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13 qualifying life events that trigger ACA special enrollment
Outside of open enrollment, a special enrollment period allows you to enroll in an ACA-compliant plan (on or off-exchange) if you experience a qualifying life event.

Latest News & Topics

Latest News & Topics


Finalized federal rule reduces total duration of short-term health plans to 4 months
A finalized federal rule will impose new nationwide duration limits on short-term limited duration insurance (STLDI) plans. The rule – which applies to plans sold or issued on or after September 1, 2024 – will limit STLDI plans to three-month terms, and to total duration – including renewals – of no more than four months.
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employer shared-responsibility provision

What is the employer shared-responsibility provision?

This ACA provision took effect in 2015 and applies ONLY to employers with at least 50 full-time equivalent employees. The employer shared responsibility provision requires these large employers to offer affordable health insurance that provides minimum value to all full-time employees (working at least 30 hours per week). If they do not, and if at least one of the employees receives a subsidy to purchase health insurance in the exchange, the employer will be assessed a penalty.

Affordability and minimum value

Here’s an overview from the IRS in terms of the requirements the health coverage has to fulfill in order to be considered affordable and provide minimum value.

  • A plan provides minimum value if it pays for at least 60% of overall medical costs for a standard population and also provides “substantial” coverage for inpatient and physician services.
  • The specifics for affordability vary from one year to the next, as they are indexed. For 2023, an employer fulfills the affordability requirement if the employee’s cost (ie, the part that’s payroll deducted) for the cheapest plan the employer offers (that also provides minimum value) is no more than 9.12% of the employee’s household income (this is down from 9.61% in 2022). Note that the cost to add a spouse and/or dependents to the plan is not taken into consideration when determining whether an employer is offering affordable coverage. That is still the case even now that the family glitch fix is in effect; even if family members end up being eligible for subsidies as a result of the family glitch fix, the employer has fulfilled their obligations as long as just the employee’s coverage is considered affordable.

Penalty amount differs for employers who don’t offer coverage, versus those who offer coverage that doesn’t meet minimum requirements

The ACA provides for two different employer mandate penalty calculations: One applies if the employer simply doesn’t offer coverage to at least 95% of full-time (30+ hours per week) workers.

The other applies if the employer does offer coverage, but it’s either not considered affordable or it doesn’t provide minimum value.

Details about both penalty calculations are provided here by the IRS, and the indexing for the penalty amounts are detailed in Question 55 in this guidance.

How much is the employer mandate penalty?

As of 2023, the penalty for not offering coverage to at least 95% of full-time employees is $2,880 per full-time employee, after subtracting the first 30 full-time employees. And the penalty for an employer that offers coverage that isn’t affordable and/or doesn’t provide minimum value is $4,320 per full-time employee who obtains a premium tax credit in the marketplace. In both cases, the penalty is only triggered if at least one full-time employee obtains a premium tax credit in the marketplace.

So if an employer with 100 full-time employees does not provide health coverage at all and at least one full-time employee gets a premium tax credit in the marketplace, the employer will owe a penalty of $201,600 for 2023 (calculated as 70 x 2,880, with 70 being the number of full-time employees after subtracting 30). This penalty started out as $2,000 per employee in 2015, but has since grown to $2,880.

If an employer offers coverage that isn’t affordable and/or doesn’t provide minimum value, the employer’s penalty for 2023 will amount to $4,320 per full-time employee who obtains a premium tax credit in the marketplace (ie, the employee rejects the employer’s offer of coverage because it’s not affordable and/or does not provide minimum value, and gets subsidized individual/family coverage in the marketplace instead). This penalty amount is up from $3,000 when the penalty first took effect in 2015. And the penalty for offering sub-standard coverage can’t be larger than the penalty for not offering coverage at all, so the lesser of the two penalty amounts is used in this case.

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