The Affordable Care Act (ACA) requires individuals to have minimum essential health coverage or make an “individual responsibility payment” with their tax returns. Employees meet this mandate by enrolling in your group health plan or by buying individual policies on the individual exchanges. Tax break: Employees are exempt from the payment if they can’t afford your group coverage.
The IRS has issued final regulations that cover how group plans’ design affects affordability for purposes of this individual mandate. The regs became effective Nov. 26, 2014. (79 F.R. 70464, 11-26-14)
Getting to more than 8%. For purposes of the individual responsibility payment, group coverage is unaffordable if employees’ required contributions exceed 8% (adjusted for inflation) of their household income. Employees’ required contributions are lowered by certain payments, thus, potentially, making the coverage affordable.
Under the final regs, em...(register to read more)