Employers aren’t the only ones subject to the provisions of the Affordable Care Act (ACA). Right now, you’re probably focused on the Employer Shared Responsibility mandate required reports and measurement periods (if you qualify as an applicable large employer, or ALE). Employees, on the other hand, are more concerned about the individual mandate that says nearly all Americans need to be covered under a medical plan that meets the ACA requirements for minimum coverage and affordability. Individuals who don’t have this coverage risk paying a tax penalty that’s the greater of 2% of pay or $325 for 2015. The penalty increases to the greater of 2.5% of pay or $625 in 2016.
Every situation is different
If you offer your worksite employees a medical plan that meets the ACA requirements (such as the ADP TotalSource®., Inc. Health and Welfare Plan), employee compliance with the individual mandate is as easy as being enrolled in your plan.
But what about the employees who aren’t eligible for the coverage you offer? Or what if you don’t offer coverage that satisfies the ACA requirements? What options do your employees have?
The answer to that question depends on the individual’s situation. For example, some employees may enroll in medical coverage through the Health Insurance Marketplace (aka “health insurance exchange”). Some may qualify for a low-income tax credit that can be used to help pay for Marketplace coverage. Others may qualify for Medicaid, or their dependents may be eligible for coverage under the Children’s Health Insurance Program (CHIP).
For a list of possible scenarios and corresponding suggestions for the best coverage option, read the article called “Breaking Down Your Medical Options.” You may want to post it on your intranet or bulletin boards and have it handy to give to worksite employees when a life event occurs that could change where they receive coverage. The article will also be available on My TotalSource®.
For more information about the individual mandate, visit the Affordable Care Act Corner on My TotalSource, or contact your Human Resource Business Partner.