The bottom line for you to avoid free-rider penalties under the Affordable Care Act (ACA) health care reform law is not to have employees obtain health insurance on the individual exchange and qualify for premium tax credits or other cost sharing reductions. Three sets of regulations steer you through this maze.
Qualifying for premium tax credits. Employees become eligible for premium tax credits and other cost sharing reductions when their group health plan doesn’t cover minimum essential benefits and their contributions for the lowest-cost plan for self-only coverage exceed 9.5% of their household income (even if they opt for family coverage).
Final regs, which become effective for tax years beginning after Dec. 31, 2013, offer penalty relief to employers by loosening two key requirements.
- Employees who actually enroll in employer-sponsored group coverage aren’t eligible for premium tax credits, even if the group coverage...(register to read more)