{ "id": "R43981", "type": "CRS Report", "typeId": "REPORTS", "number": "R43981", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 452454, "date": "2016-04-22", "retrieved": "2016-10-17T20:06:28.995707", "title": "The Affordable Care Act\u2019s (ACA) Employer Shared Responsibility Determination and the Potential Employer Penalty", "summary": "The Affordable Care Act (ACA) creates shared responsibilities for both employers and individuals with regard to health insurance coverage. The ACA expands federal private health insurance market requirements and requires the creation of health insurance exchanges to provide individuals and small employers with access to insurance. This report examines the new employer responsibilities.\nTo ensure that employers continue to provide some degree of health coverage, the ACA includes a \u201cshared responsibility\u201d provision. This provision does not require that an employer offer employees health insurance; however, the ACA imposes penalties on a \u201clarge\u201d employer if at least one of its full-time employees obtains a premium credit through the newly established exchange. \nAs of 2015, employers with at least 50 full-time equivalent (FTE) employees are subject to the shared responsibility provisions. However, in 2015 only, employers with between 50 and 100 FTE employees were eligible for transition relief if certain criteria were met.\nThe ACA sets out a multi-stage process for determining, first, which firms may be subject to the penalty (i.e., definition of large), and second, which workers within a firm would trigger the penalty. Complex calculations and multiple definitions of full-time work have led to confusion among policymakers and employers. This report discusses these definitions and the application to the employer penalty in greater detail.\nThe potential employer penalty applies to all common law employers, including government entities (such as federal, state, local, or Indian tribal government entities) and nonprofit organizations that are exempt from federal income taxes. If multiple businesses are owned by one individual or entity, employees in each of the franchises must be aggregated to determine the number of both FTEs and full-time employees.\nThe actual amount of the penalty varies depending on whether an employer currently offers insurance coverage and the number of full-time employees. Employers must provide both affordable and adequate health insurance coverage to avoid paying a penalty. Coverage is considered affordable if the employee\u2019s required contribution to the plan does not exceed 9.66% of the employee\u2019s household income for 2016. However, the Internal Revenue Service (IRS) allows employers to use the employee\u2019s W-2 income in lieu of household income for this calculation (because most employers do not readily have information on an employee\u2019s household income). A health plan is considered to provide adequate coverage if the plan\u2019s actuarial value (i.e., the share of the total allowed costs that the plan is expected to cover) is at least 60%. \nThe total penalty for any applicable large employer is based on its number of full-time employees. The ACA specified that working 30 hours or more per week is considered full-time. Employers have some flexibility to designate certain measurement or look-back periods (up to 12 months) during which they calculate whether a worker is full-time or not. Once an employee is determined to be full-time, there is an administrative period to enroll employees in a health plan, if necessary. If an employer penalty is levied under the ACA requirements, it applies only for the time period following the administrative period, which is called the stability period. An employer is not penalized if an employee enters the exchange and receives a premium credit during the measurement period. \nAppendix A provides a list of employer reporting requirements. Appendix B includes a table of relevant legislation introduced in the 114th Congress.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43981", "sha1": "aaae4a490d8f0dc57aeada63c6c4a32837d806fd", "filename": "files/20160422_R43981_aaae4a490d8f0dc57aeada63c6c4a32837d806fd.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43981", "sha1": "a2756f0fd411c830aa7a9e2356d4f4233316bbe2", "filename": "files/20160422_R43981_a2756f0fd411c830aa7a9e2356d4f4233316bbe2.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 4790, "name": "Private Health Insurance" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc847595/", "id": "R43981_2016Apr19", "date": "2016-04-19", "retrieved": "2016-06-02T05:26:07", "title": "The Affordable Care Act's (ACA) Employer Shared Responsibility Determination and the Potential Employer Penalty", "summary": "This report describes potential employer penalties as well as regulations to implement the ACA employer provisions. The regulations address insurance coverage requirements, methodologies for determining whether a worker is considered full time, provisions relating to seasonal workers and corporate franchises, and other reporting requirements.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20160419_R43981_7ac0eba30d5aadc7c8a87af08fb5a25f1088b137.pdf" }, { "format": "HTML", "filename": "files/20160419_R43981_7ac0eba30d5aadc7c8a87af08fb5a25f1088b137.html" } ], "topics": [ { "source": "LIV", "id": "Health policy", "name": "Health policy" }, { "source": "LIV", "id": "Health care reform", "name": "Health care reform" }, { "source": "LIV", "id": "Health insurance", "name": "Health insurance" } ] }, { "source": "EveryCRSReport.com", "id": 445014, "date": "2015-09-03", "retrieved": "2016-04-06T18:27:07.073516", "title": "The Affordable Care Act\u2019s (ACA) Employer Shared Responsibility Determination and the Potential ACA Employer Penalty", "summary": "The Affordable Care Act (ACA) creates shared responsibilities for both employers and individuals with regard to health insurance coverage. Additionally, the ACA expands federal private health insurance market requirements and requires the creation of health insurance exchanges to provide individuals and small employers with access to insurance. This report examines the new employer responsibilities.\nTo ensure that employers continue to provide some degree of health coverage, the ACA includes a \u201cshared responsibility\u201d provision. This provision does not require that an employer offer employees health insurance; however, the ACA imposes penalties on a \u201clarge\u201d employer if at least one of its full-time employees obtains a premium credit through the newly established exchange. \nBeginning in 2015, employers employing at least 50 full-time equivalent (FTE) employees are subject to the shared responsibility provisions. However, in 2015 there is transition relief for employers employing between 50 and 100 FTE employees if certain criteria are met.\nThe ACA sets out a multi-stage process for determining, first, which firms may be subject to the penalty (i.e., definition of large), and second, which workers within a firm would trigger the penalty. The complex calculations and multiple definitions of full-time work have led to confusion among policymakers and employers. This report discusses these definitions and the application to the employer penalty in greater detail.\nThe potential employer penalty applies to all common law employers, including government entities (such as federal, state, local, or Indian tribal government entities) and nonprofit organizations that are exempt from federal income taxes. If multiple businesses are owned by one individual or entity, employees in each of the franchises must be aggregated to determine the number of both full-time equivalent and full-time employees.\nThe actual amount of the penalty varies depending on whether an employer currently offers insurance coverage and the number of full-time employees. In order for employers who do provide health insurance coverage to avoid paying a penalty, the coverage must be both affordable and adequate. Coverage is considered affordable if the employee\u2019s required contribution to the plan does not exceed 9.5% of the employee\u2019s household income for the taxable year. However, the Internal Revenue Service (IRS) allows employers to use the employee\u2019s W-2 income in lieu of household income for this calculation (since most employers do not readily have information on an employee\u2019s household income). A health plan is considered to provide adequate coverage if the plan\u2019s actuarial value (i.e., the share of the total allowed costs that the plan is expected to cover) is at least 60%. \nThe total penalty for any applicable large employer is based on its number of full-time employees. The ACA specified that working 30 hours or more per week is considered full-time. Employers have some flexibility to designate certain measurement or look-back periods (up to 12 months) during which they will calculate whether a worker is full-time or not. Once an employee is determined to be full-time, there is an administrative period to enroll employees in a health plan, if necessary. If an employer penalty is levied under the ACA requirements, it applies only for the time period following the administrative period, which is called the stability period. An employer is not penalized if an employee enters the exchange and receives a premium credit during the measurement period. \nAppendix B includes a table of relevant legislation introduced in the 114th Congress.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43981", "sha1": "0d24791258073fccd826fd215aef5d3f6bd8a030", "filename": "files/20150903_R43981_0d24791258073fccd826fd215aef5d3f6bd8a030.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43981", "sha1": "ff6cf3975e16285ec05b1e1bd577b7dcb641931a", "filename": "files/20150903_R43981_ff6cf3975e16285ec05b1e1bd577b7dcb641931a.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 3746, "name": "Health Care Reform" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc743623/", "id": "R43981_2015Sep01", "date": "2015-09-01", "retrieved": "2015-10-20T21:35:54", "title": "The Affordable Care Act's (ACA) Employer Shared Responsibility Determination and the Potential ACA Employer Penalty", "summary": "This report describes the potential employer penalties related to the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended) as well as regulations to implement the ACA employer provisions. The regulations address insurance coverage requirements, methodologies for determining whether a worker is considered full time, provisions relating to seasonal workers and corporate franchises, and other reporting requirements.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20150901_R43981_956885ef29a16cc2ae6cc7dbd54bce030635cef7.pdf" }, { "format": "HTML", "filename": "files/20150901_R43981_956885ef29a16cc2ae6cc7dbd54bce030635cef7.html" } ], "topics": [ { "source": "LIV", "id": "Health policy", "name": "Health policy" }, { "source": "LIV", "id": "Health care reform", "name": "Health care reform" }, { "source": "LIV", "id": "Health insurance", "name": "Health insurance" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc806845/", "id": "R43981_2015Apr10", "date": "2015-04-10", "retrieved": "2016-03-19T13:57:26", "title": "Affordable Care Act (ACA): Employer Shared Responsibility Determinations and Potential Penalties", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20150410_R43981_bb339a230336272af29722743e2609f324d8c9a8.pdf" }, { "format": "HTML", "filename": "files/20150410_R43981_bb339a230336272af29722743e2609f324d8c9a8.html" } ], "topics": [] } ], "topics": [ "Domestic Social Policy" ] }