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What is an Employer Shared Responsibility Payment?


Employer shared responsibility payments will only affects large employers with 50 or more full time equivalent employees (FTE). The purpose of the payments was to prevent employers from discrimination when offering health insurance. The effective date of the employer shared responsibility payment rule was pushed back from January 1, 2014, to January 1 2015. The reason for the delay was because on July 2, 2013 the U. S. Treasury Department announced that it would delay the implementation of the employer mandate until January 1, 2015. The employer mandate was a provision in the Affordable Care Act (ACA) that required employers with 50 or more FTE’s to offer health insurance to their employees.


Starting on January 1, 2015 employers with 50 or more FTE’s that have at least one full time employee receiving a subsidy for coverage may be assessed a penalty if:


The employer fails to offer employees and their dependents health insurance coverage that meets the established minimum essential coverage requirements or


The employer offers such coverage and it is deemed unaffordable or does not provide minimum value.


The SBA offers an online calculator that measures the 60% minimum value threshold.

An employer could be penalized if it does not offer coverage to at least 95% of their full time employees.  If one or more full time employees gets subsidized coverage the penalties would be as follows:


  • Business with 50 full-time employees: $40,000 per year
  • Business with 100 full-time employees: $140,000 per year
  • Business with 200 full-time employees: $340,000 per year
  • Business with 500 full-time employees: $940,000 per year
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