Large Group Changes in Health Care Beginning in 2014

Beginning on January 1, 2014, large group businesses with 50 full time employees or full time equivalent part time employees will be penalized if they fail to provide proper health care coverage. The employee headcount will be made in 2013 and will determine whether the employer is subject to any penalties. The employer will not be penalized if the company has 50 full time employees or equivalent for less than 120 days during the calendar year or seasonal employees that work less than 120 days in the calendar year.

In calculating the number of full time employees for a large business, first you must determine the number of full time employees for a one month period. Then you determine the number that is equal to the number of hours worked by part time employees in a month divided by 120 and add the total. The penalty for failure to provide adequate coverage is $2000 per full time employee multiplied by the number of full time employees minus 30. This penalty is applied when no health care coverage is provided.

In addition, an employee may qualify for subsidized coverage from the government if they are a family of 4 earning $88,200 or an individual earning $43,320. These families or individuals must notify the state if they qualify for subsidies. However, if the employer does not provide affordable coverage to these families or individuals, a penalty of $3,000 per full time employee will be incurred. Some commentators suggest that employers may be more willing to pay the penalties since it may end up being less expensive than providing health insurance.

This decision under the Affordable Care Act excludes small businesses employing less than 50 employees. There is a loop hole provision for most major companies involving the division of a company with 100 employees into two companies with 50 employees in each.

Overall, the Affordable Health Care Act will have a huge affect on large businesses and employers must be aware of these changes in the industry occurring January 1, 2014.

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