Employer Shared Responsibility Payment

Starting in 2015, employers who don’t offer qualifying coverage, will make a Employer Shared Responsibility Payment. Get simplified instructions on the fee below.

This page covers employer responsibility under the ACA and the payment. For more details see Employer Mandate.

What is Shared Responsibility?

Shared Responsibility is part of the ACA’s Title I. Subtitle F—Shared Responsibility for Health Care that says: The federal government, state governments, insurers, employers and individuals are given shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States.

What is an Employer Shared Responsibility Payment?

This is the fee employers will pay if they don’t provide coverage to their workers, or if they provide coverage that doesn’t meet minimum guidelines (discussed below).

When Does Employer Shared Responsibility Start?

No Employer Shared Responsibility payments will be assessed for 2014.

Firms with a 100 or more full-time equivalent employees (FTE), and average annual wages above $250,000, will need to insure at least 70% of their full-time workers by 2015 and 95% by 2016. Small businesses with 50-99 FTE will need to start insuring full-time workers by 2016. The mandate does not apply to employers with 49 or less FTE.

Who Has to make a Employer Shared Responsibility Payment?

If an employer doesn’t provide coverage, or provides coverage that doesn’t offer minimum value (at least the cost sharing of a Bronze plan on the Marketplace) or it is unaffordable (9.5% of employee only premium) then they must make a per employee, per month “Employer Shared Responsibility Payment“.

See IRS rules for minimum value. All SHOP plans provide minimum value.

How Does an Employer make the Employer Shared Responsibility Payment?

Unlike individuals employers will not be required to include the Shared Responsibility payment on any tax return that they file.

The IRS will provide the employer with a notice about the payment, employers will not be required to include the Employer Shared Responsibility payment on any tax return that they file.