Calculating Mandate Fees – How to Subtract First 30?
I have 40 fulltime employees and with new business expansion (lord forbid we expand) I will have part time works that add up to 14 FTE. This means when adding 14 to the 40 I have 54 Fulltime employees putting me over the 50 limit barely. So when taking the excluded 30 fulltime employees in to consideration do I take that from the 54 FTE or the 40 fulltime? Will I pay 2000.00 for 10 employees or for 14?
Answer
When calculating the fee for the employer mandate you would subtract 30 full-time employees from full-time employees (with each 30 FTE hours counting as one employee for purposes of the mandate). We suggest using the penalty calculator from the US chamber of commerce for simple guidance. You owe the fee if and only if your employee's use the Health Insurance Marketplace and get tax credits. You can pay per employee who get's tax credits at $3,000 annual or $2,000 annual for all minus the first 30.
This can seem frustrating when going over the line, this is the way those who are going just over 400% FPL are feeling, and this is how other people just over whatever line are feeling. But luckily the first 30 bit does help to smooth things out.
If you really want to dig in you'll need to look at the Federal Register where guidance for employers was printed.
Here is a an expert.
An employer may be liable for an assessable payment under section 4980H(a) or (b) only if one or more full-time employees are certified to the employer as having received an applicable premium tax credit or cost-sharing reduction. The assessable payment under section 4980H(a) is equal to the number of all full-time employees (excluding 30 full-time employees) multiplied by one-twelfth of $2,000 for each calendar month, while the assessable payment under section 4980H(b) is based on the number of full-time employees who are certified to the employer as having received an applicable premium tax credit or cost-sharing reduction with respect to that employee's purchase of health insurance for the employee on an Affordable Insurance Exchange (Exchange) [1] multiplied by one-twelfth of $3,000 for each calendar month. In no case, however, may the liability under section 4980H(b) exceed the maximum potential liability under section 4980H(a). Generally, liability under section 4980H(b) may arise because, with respect to a full-time employee who has been certified to the employer as having received an applicable premium tax credit or cost-sharing reduction, [2] the coverage [3] offered by the employer is not affordable within the meaning of section 36B(c)(2)(C)(i) or does not provide minimum value (MV) within the meaning of section 36B(c)(2)(C)(ii). An employee's receipt of a premium tax credit under section 36B (premium tax credit) with respect to coverage for a dependent only will not result in liability for the employer under section 4980H.