If Employees Decline Coverage, are there Still Penalties?
We are a staffing company who uses approximately 3000 employees a year, 250 which are deemed full time by ACA standards. We have a program in place that meets minimum requirements, however, only 5 people want the coverage while the balance have declined (in writing). Are we exempt from any penalties?
If your employee's get cost assistance on the Marketplace and coverage didn't meet affordability or minimum coverage guidelines, then you'll owe a fee.
In other words, if you offer coverage that meets guidelines, no employees actually have to take it, and none will be able to use the Marketplace.
Get details on the fee and minimum requirements from our employer mandate page.
NOTE FROM AUTHOR: Somewhere I recall reading that if a very large employer offers a plan that doesn't meet guidelines and more than 200 (or 250?) employees use the Marketplace (but don't get cost assistance) the fee does apply. We can't find any evidence to back this up. So this would apply to perhaps a very high paying firm where all employees were priced out of cost assistance. Seems like a reasonable rule, however take this recollection with a grain of salt until we get an official answer. Until then the rule above about minimum guidelines, and employees getting subsidies, is the rule printed on both the IRS website and in the law itself.