Health Care Reform

Employer Mandate


Generally, the Patient Protection and Affordable Care Act (PPACA) requires that by Jan. 1, 2015, applicable large employers must decide whether to "pay or play" in the realm of employer-sponsored group health plans.

An employer may be required to pay a penalty for failing to offer a group health plan altogether or for providing coverage that is either unaffordable or not of minimum value. The penalty would be triggered if one of the employer's full-time employees obtained coverage through a health insurance exchange and qualified for a premium tax subsidy.

Alternatively, an employer will not pay a penalty if it decides to "play" by offering affordable, minimum value group health coverage for its employees (and their dependents). PPACA refers to the "pay or play" requirement as "shared responsibility" or the “employer mandate,” and employers need to understand the possible impact on plan designs, contribution strategies and workforce planning.

This section includes information on the employer mandate requirement.

Recent Developments

In February 2014, the IRS issued final regulations on the employer mandate. The regulations clarify that the employer mandate is generally effective Jan. 1, 2015, although there is a possible delayed effective date for employers with 50–99 full-time employees and full-time equivalents and employers with non-calendar-year plans (if certain requirements are met). The regulations provide additional clarifications on the specific requirements under the mandate, as described further on each Web page in this section.

Additional Resources

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