Clarification on 9.5% of Employee-Only Coverage

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Coverage offered to employees must be considered affordable (can’t cost more than 9.5% of employee household income) and must provide minimum value (must have an average cost sharing of 60%). A broker spike to me and said the law is actually for single plus dependent coverage for lowest paid employee (contribution). Is this mandate for single coverage or parent/child (biological child)? We need to get a clarification in order to check our compliance.

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Penalty for non compliance ?


The employer is technically penalized for every employee who uses the marketplace, thus if the employee uses the marketplace because they are exempt because employer coverage is unaffordable, it counts against the employer.

An employer must provide coverage to substantially all (95%) of employees if they have over 50 FTE.

That is the gist. The rest you can read about here in terms of the per employee fee if it kicks in


Is this Gross income or Net income? 9.5% Before or after taxes?


In layman terms. An employer must offer “affordable” coverage not to exceed 9.5% of the employees total household income for the employee portion only. They must also OFFER dependent coverage, but the employer does not have to contribute toward dependent coverage.

The above also depends on group size.


So the final rule, ” that 9.5% applies to employee-only coverage and not dependent or family coverage, ” in reality amounts to discrimination against the other family members getting affordable coverage through the marketplace and employers can mark up family plans.


If employer is charging more than 9.5% of household income do people receive tax credit?


You have to get an exemption from the marketplace, typically requiers the employer filling out an “employer coverage tool” as confirmation. Call the marketplace for direction.

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